Source: Rita Jane Gabbett, MEATINGPLACE, 7/10/14


A recent Reuters article reported fertility problems in a certain breed of rooster that Sanderson Farms was using and its impact on a chicken industry already having a hard time keeping up with demand.

Industry sources explained that the problem roosters added to an already complex supply and demand situation that started to unravel three years ago. The chicken industry could still be a year away from getting all the live birds it seeks to keep up with consumer demand for chicken products.    

Sanderson Farms Chief Financial Officer Mike Cockrell explained the situation to Meatingplace.  

The problem started with $8-a-bushel corn in 2011 and a sluggish economy that pushed up the cost of production at the same time consumer demand plummeted.

“We [Sanderson Farms] cut back 6 percent, Tyson cut back, Pilgrim’s cut back,” said Cockrell, which resulted in fewer orders to breeder stock companies like Aviagen and Cobb-Vantress. This meant those companies ordered fewer breeder stock from their growers. Some of those growers retired or went out of business when demand for their product declines.

Over the past year, chicken demand has picked up dramatically in the face of more expensive beef and pork.

USDA estimates that chicken production this year will reach a record high of  38.1 billion pounds on a ready-to-cook weight basis. But that is only 1.8 percent above 2013 levels. Current favorable market conditions would normally stimulate a production increase more aligned with the long-run annual average of 4 percent.

“So, why are chicken producers not stepping up production to better match the long-term average of 4 percent? We would if we could, but we can’t,” Bill Roenigk recently told a congressional committee on behalf of the National Chicken Council.

Without sufficient breeder stock in the pipeline, Cockrell explained, it can take 18 months to rebuild breeder stock: 25 weeks for breeder stock grandparents to mature, another 25 weeks for the breeder parents to mature, then an additional 25 weeks for the breeders sold to growers to mature and become productive.

Industry executives have estimated it could be spring of 2015 before the industry will be able to produce a material increase in chicken products in the market.

In the meantime, the industry struggles with poorer hatchability rates as breeder stock that typically retired at 65 weeks are now being kept in production for 69 or even 70 weeks.  The fertility and productivity of those birds can decline dramatically in those last weeks, according to Cockrell.

In fact, the USDA reported on Wednesday that broiler growers in the agency’s 19-state weekly program placed 166 million chicks for meat production during the week ending July 5, 2014, down 1 percent from the year earlier. Cumulative placements from Dec. 29, 2013 through July 5, 2014 for the United States were 4.63 billion, down slightly from the same period a year earlier.

Add to all that – last winter’s brutal cold. National Chicken Council spokesman Tom Super said the very cold weather this past February and a propane shortage that made it difficult to heat chicken houses also impacted fertility and hatchability.

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