Source:  Dani Friedland, MEATINGPLACE.COM, 4/18/11

Economics will force cuts in chicken production and the cuts will likely come before the fall , Deutsche Bank Equity Research analyst Christina McGlone said after attending the Express Markets Inc. Chicken conference.

“Despite industry losses, we did not get an overwhelming sense players will willingly cut in the near-term,” McGlone wrote. “However, there was much talk about imminent bankruptcies of smaller players,” and industry consolidation and continued foreign acquisition are also factors.

Chicken is still priced very favorably relative to pork and beef. Record beef and pork prices are forecast for this year and 2012, McGlone said.

Meanwhile, foodservice is increasingly demanding chicken, with no discernible impact from high gas prices as yet. “It seems foodservice operators are absorbing inflation and looking for waste in the supply chain and/or alternative menu items to offset cost pressure vs. fully passing on to consumers for fear of losing traffic,” McGlone wrote.

For more stories, go to www.meatingplace.com.