Source: Chris Scott, MEATINGPLACE, 10/29/13

The outlook for poultry supplies next year remains positive, according to at least one analyst who is updating her original 2014 forecast from September.

Heather Jones of BB&T Capital Markets originally predicted a full-year increase in the poultry supply of 5 percent, with a strong potential for even higher supplies in the second half. This morning, Jones “strongly” affirmed her view, but added that the supply growth for the calendar year should ultimately top 5 percent even though she doesn’t see a “mad rush to expand by the industry.”

Jones also said that she would not be surprised to see modest expansion in chicken segments other than big birds, which have driven growth over the last decade.

Surpassing the 5-percent growth rate should result in meaningful margin compression, regardless of the decrease in feed costs.

She also suggested that with an expected 10-percent increase in beef prices next year, foodservice activity will continue to be biased toward chicken, which remains the typical substitute for beef in foodservice operations.

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