Source: Lisa M. Keefe, MEATINGPLACE, 5/28/14
 
Broiler supplies are growing much more slowly than analysts were anticipating earlier this year, and indications are that the slow pace will continue this calendar year.

The Daily Livestock Report, published by Steve Meyer and Len Steiner Inc., noted that the size of the hatching flock has made only “modest gains” compared with year-ago levels, and that the flock as of May 1 was just 0.4 percent larger than in 2013.

While feed prices have come back down after a spike in 2012 and 2013, producers already had cut back in capacity in response to high feed prices and the capacity shortage remains. A brutal winter that damaged some poultry facilities, particularly in the Southeast, also is a factor, they said.

Steiner and Meyer expect that broiler supplies will grow at a rate of less than 2 percent year-over-year through the fall, with that pace stretching into 2015, which will help keep prices elevated. Export demand remains a “wild card,” however, especially in Mexico, which continues to battle a highly pathogenic avian influenza virus.

Heather Jones, an equity analyst for BB&T Capital Markets, echoes those sentiments, but points out that an older, less productive breeder flock has compounded the supply problem.

That having been said, however, she expects pullet placement to accelerate into 2015, with “more significant year-over-year increases” showing up in the second half of of that year. She also notes the use of a “new male breed that yields a substantially higher boneless/skinless yield” along with weight gains. She thinks full-year production gains in 2015 will be 3.5 percent to 5 percent increased over 2014.

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