Source: Rita Jane Gabbett, MEATINGPLACE, 6/20/16


Preliminary production data for broilers in May was stronger than expected, and official April data was 3.2 percent higher than in 2015 after adjusting for slaughter days, the USDA said in its monthly Livestock, Dairy and Poultry Outlook report.

This led the second quarter forecast to be revised up by 25 million pounds. Average live weight at slaughter hit a historical high in April once again; however, year-to-date growth in average live weight is slower than the previous two years.

Tepid growth of broiler eggs in incubators is also likely to continue, currently under 0.4 percent growth on a year-to-date basis. This trend may continue as feed costs in 2015/16 and 2016/17 are not expected to decline as much as previously forecast and broiler prices are expected to remain relatively weak. Therefore, production forecasts for the third and fourth quarters were lowered 25 million pounds and were lowered 10 million pounds for the first quarter of 2017.

Prices
Weekly May prices for whole birds at wholesale were up to the highest level of the year, according to the national composite figure. Coupled with slower forecast growth in production, the whole broiler price forecast was raised to average 88 cents to 91 cents per pound this year and raised to 85 cents to 93 cents per pound for 2017.

The recent upward trend for whole birds follows a seasonal pattern of typically higher prices, but seasonal trends have not affected breast meat very strongly.

Prices for boneless skinless breasts at wholesale have performed poorly all year and were back below $1.14 per pound on the Northeast market for the week ending June 4. One likely reason is that breast meat stocks have been well above year-earlier levels thus far this year, with month-ending data for April showing stocks increased counter-seasonally to a record 186.5 million pounds.

While leg quarter prices do not typically follow a strongly seasonal pattern, they had been recovering from 2015 lows before plateauing in May, particularly in the Northeast market. This coincided with the first increase in month-ending data for leg quarter stocks since September, a fairly marginal increase nonetheless. Stocks of all broiler meat also reversed a recent downward trend, as April 30 stocks were higher than the previous month. This led to an upward revision of 2016 ending stocks to 695 million pounds.

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