November 18, 2011

US broiler production to decrease in Q4

US broiler meat production in the fourth quarter is expected to be 5.1% lower than a year earlier at 9.0 billion pounds, according to the USDA's Research Service.

The lower Q4 production is predicted to be driven by sharp drops in the total of birds slaughtered, but these declines are expected to be offset by an increase in average live weights.

In recent weeks, preliminary slaughter data show a lower overall number of broilers slaughtered driven by reduced numbers of lighter birds, pointing towards higher average weights.

US broiler meat production in Q3 totalled 9.53 billion pounds, 0.3% above the same period in 2010. This increase was the result of a 3% rise in average live weights, to 5.80pounds. The increase offsets a decline of 2.9% in the number of broilers slaughtered. Broiler meat production in 2012 is forecast at 36.7billion pounds, a decrease of 1.7% from 2011. The decline in broiler meat production is expected to come primarily from a lower number of birds slaughtered, as bird weights are expected to be close to or slightly higher than in 2011.

Broiler integrators are not expected to have a strong incentive to expand production, due to the continued high prices for corn and soybean meal and relatively low broiler product prices at the wholesale level. Demand growth will likely be offset by relatively slow economic growth and continued high unemployment.

The most recent weekly broiler hatchery report indicates the number of chicks placed for growout from October 8 to November 5 averaged 7.9% lower than on-year. This five-week moving average has become more strongly negative over the last several months. The number of chicks placed for growout is expected to remain well below on-year levels till the end of 2011 and into 2012, but gradually to become closer to on-year levels in mid-2012.