Source: Tom Johnston, MEATINGPLACE, 10/24/13

Commercial hatcheries set 188 million eggs in incubators during the week ended Oct. 19, up 6 percent from the eggs set the corresponding week a year earlier.

Average hatchability for chicks hatched during the week was 84 percent.

Broiler growers, meanwhile, placed 162 million chicks for meat production during the week, up 5 percent from the comparable week a year earlier.

Cumulative placements from Dec. 30, 2012, through Oct. 19, 2013, were 6.91 billion, up 1 percent from the same period a year earlier.

Egg set growth accelerates
The latest report marks the third week in the last four weeks that egg sets were up by more than 5 percent year-on-year, the largest increases since 2010, notes JP Morgan equity analyst Ken Goldman. In the final week reported before the fedearl government's shutdown, egg sets were reported to be up only 1.5 percent year-on-year, far less than the 4-5 percent of preceding weeks, he wrote in a note to investors.

"This turned some industry observers more hopeful on chicken margins, we believe, on the anticipation that supply increases perhaps would be restrained," Goldman wrote. "Today’s report, however, threw some cold water on this theory and suggests the 1.5% figure (revised to 1.7%) was more the exception than the rule. Indeed, egg set growth seems to be accelerating."

One factor that might help offset the trend, Goldman notes, is that egg productivity continues to decrease.

"We believe this is because the layer flock is older and less efficient, and we expect this trend to reverse as younger pullets enter the layer flock in a few months," he wrote.

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