Source: Chris Scott, MEATINGPLACE, 7/29/19


Chicken producers are expected to prosper despite a recent rise in feed costs and softness in breast meat pricing, according to an industry analyst who adds that turkey prospects are progressing at a slower pace.

Poultry supplies have remained manageable in 2019 with wings and leg quarters selling well above 2018 prices, Stephens Inc. analyst Ben Bienvenu reported after a conference call with Urner Barry Poultry and Egg analysts last week. A cooler-than-usual spring resulted in higher bird weights this year, putting pressure on boneless chicken breast prices in the near term, he says.

Warmer summer temperatures could turn that situation around, although wetter and hotter weather – resulting in late plantings and lower yields, respectively – sparked a rise in feed costs in recent months.

The analysts reiterated their beliefs that the impact of African Swine Fever (ASF) on poultry demand will be a “multi-year positive for the protein industry” as an expected shortfall in pork products from the deadly disease should prompt shifts among consumer diets on a global basis. The report notes that “ASF is real … and there are inherent limitations in ramping (poultry) production, which should be bullish for pricing once exports begin to increase.”

The report added that the pace of recovery for turkey industry profitability remains slower than anticipated. The analysts, however, “remain optimistic” about turkey industry supply cutbacks and the global demand from ASF rises in the coming months as China “depletes its inventory of pork.”

Year-to-date turkey exports are 3.3% higher than the same period one year ago, with pricing for whole birds climbing 6.2% from a year ago to 93 cents per pound, the analysts added.

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