February 20, 2006

US 2006 broiler output seen at 36.1 billion pounds

US broiler production this year is projected at a record 36.1 billion pounds, up 2 percent from 2005, according to the US Department of Agriculture.

In a report issued at its annual Agricultural Outlook Forum, the USDA said broiler production expanded by about 4 percent in each of the last two years when prices were strong. However, with increasing uncertainty in international trade because of the highly pathogenic avian influenza, commonly called bird flu, a large buildup in supplies at the end of last year, and weaker prices since the fall, expansion in production is expected to be less this year.

The USDA projects the 12-city average price for whole birds to average 65 to 69 cents per pound in 2006, down from the record high of 73.4 cents last year. Increased production and pressure from expected lower prices for pork and beef are seen weighing on broiler prices.

Broiler meat exports are expected to increase by about 5 percent to 5.4 billion pounds. However, the agency said the "export situation is in a state of flux" due to expanded cases of avian influenza that have slowed demand in parts of Asia and eastern Europe. Exports during the last quarter of 2005 slowed more than had been expected and dropped 14 percent from the final quarter of 2004.

The USDA says broiler exports likely will be below the year-ago level throughout the first half of 2006 then recover somewhat in the last half if avian influenza concerns do not intensify.

In the turkey sector, production in 2006 is seen increasing by more than 1 percent to about 5.6 billion pounds. Production remains below the record highs of 5.7 billion reached in 2002 and 2003. In 2005, heavier live weight offset a drop of 2.7 percent in the number of birds slaughtered, resulting in a slight gain in turkey meat production.

With limited gains in turkey production expected for 2006, prices are forecast to remain firm at 70 to 75 cent per pound.

The USDA predicts turkey exports will reach 600 million pounds this year, a new record and up 5 percent from last year. Mexico was the leading export customer for US turkey meat in 2005 with 354 million pounds shipped there.

Egg production is seen up about 2 percent this year. Egg exports are expected to be about 200 million dozen in 2006, down from last year's figure of 209.6 million dozen, which was the highest since 1998. Prices are seen averaging between 68 to 73 cents per dozen.