Source: Michael Fielding, MEATINGPLACE, 1/1/15

Broiler meat production in October continued to show at least a small gain over the previous year, totaling 3.5 billion pounds, 1.4 percent higher than the previous year. The increase pushed the year-to-date total for the first 10 months of 2014 to 32.3 billion pounds, 1.5 percent higher than during the same period in 2013, according to the according to the Livestock, Dairy and Poultry Outlook report of the Economic Research Service.

The broiler meat production estimate for fourth-quarter 2014 is 9.75 billion pounds, as the number of chicks being placed for growout has been increasing during the last 2 months. This is 2 percent higher than in fourth-quarter 2013 and would place the total for 2014 at 38.5 billion pounds, an increase of 1.7 percent from a year earlier.

In October 2014, the number of broilers slaughtered totaled 770 million birds, up fractionally (0.2 percent) from the previous year. With almost no gain in slaughter, the increase in broiler meat production in October was due chiefly to a 1-percent increase in the average liveweight per bird.

In October the average liveweight at slaughter was 6.07 pounds. Average liveweight at slaughter is expected to be very close to 6 pounds per bird in 2014, about 1.2 percent higher than in 2013. Average liveweight has been increasing over the last decade: in 2004 the average liveweight at slaughter was 5.27 pounds. The forecast of considerably lower feed prices and favorable economic conditions for the remainder of 2014 and into 2015 is expected to give broiler integrators incentive to continue expanding production.

Between Nov. 8 and Dec. 6, chick placements for growout averaged 163 million, up 2.2 percent from the same period in 2013. Eggs placed in incubators during this same period averaged 2.7 percent more than at the same time in 2013, so chick placements through the middle of December were expected to continue to be well above their year-earlier level.

Chick placements are expected to remain above year-earlier levels into 2015 as broiler production expansion continues.

In October 2014, 760 million broiler chicks were hatched, up 2.9 percent from the previous year. Over the first half of 2014, the monthly number of broiler chicks hatched was 5.31 billion, about unchanged from the same period last year. Over the last 4 months, the number of chicks hatched has been higher than the previous year in each month. The year-over-year growth in the number of chicks hatched is expected to continue in both the remainder of 2014 and into 2015; the number of broiler hens in the hatching flock has continued higher than the previous year in September and October and forecast lower grain prices and falling prices for energy products are expected to encourage broiler integrators to expand production
into 2015.

Broiler stocks at the end of October totaled 627 million pounds, down 9.5 percent from October 2013. While overall cold storage holdings for broiler products have been below year-earlier levels for the last 8 consecutive months, stocks for different broiler parts have followed very different patterns.

In October, cold storage holdings were down sharply for whole birds and wings. These declines were partially offset by strong increases in stocks for breast meat and legs.

Stocks for whole birds have been well below year-earlier levels throughout the first 10 months of 2014 and at the end of October totaled 11.7 million pounds, 58 percent lower than a year earlier. Stocks of wings in 2014 started the year with slightly higher stocks than at the beginning of 2013, but over the last 8 months cold storage holding of wings has been between 25 and 38 percent lower than at the same time in 2013.

The opposite has been true for both breast meat and legs. For both those parts, stocks were below year-earlier levels at the start of 2014 but rapidly moved to levels well above the previous year, with breast meat 20 percent higher than the previous year at the end of October and legs 41 percent higher. Overall broiler stock levels are expected to total 610 million pounds at the end of 2014, 9 percent lower than the previous year. However, with increasing production, stock levels in 2015 are expected to be higher than their year-earlier levels.

Average prices for many broiler products were higher during November 2014 than the previous year. The breakout of prices that were higher or lower follows the same pattern as the previous month. Basically, prices were higher for whole birds, breast meat products, and wings, with prices for most leg meat products lower than the previous year. Although prices for boneless/skinless breast meat had fallen significantly over the last two months ($1.44 per pound in November versus $1.87 per pound in September), prices in November were 14 percent higher than a year earlier.

Prices were also higher in November for whole birds (up 11 percent) and breasts with ribs (up 6 percent). With considerably lower cold storage holdings, prices for wings averaged $1.79 per pound in November, up 46 percent from a year earlier. For the most part, prices for leg meat parts were lower. Prices for boneless/skinless thigh meat, whole thighs, and drumsticks were all down (2.6 to 5.6 percent) from November 2013. An exception to lower leg meat prices was leg quarters, which averaged $0.46 per pound in November, up 5 percent from a year earlier.

With higher year-over-year production expected in fourth-quarter 2014 and into 2015, broiler prices are expected to continue under some downward pressure, but they are expected to benefit somewhat from very strong beef prices.

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