October egg sets were down nearly a full percent compare to last year, which the Livestock Marketing Information Center (LMIC) said suggests pessimism is developing in the broiler sector. In fact, LMIC reported that the previous month egg sets were down a quarter-percent from a year ago. Chicks placed followed a similar trend, down 1% in October compared to September and less than a half-percent drop compared to a year ago.

Broiler production year to date is about 1% above a year ago, a gain LMIC said has been almost exclusively driven by the 7.5% increase in broiler production in the first quarter. Subsequent quarters have not exceeded year-ago levels. Production in the second quarter declined about 1.1% from the same period in 2019, and in the third quarter, even though slaughter disruptions were largely over, it declined 2.1%. LMIC said the number of chicks placed in October is setting the stage for fourth-quarter production below the year-ago level as well. October production was down 2.4% from the prior year.

Hatcheries are using the volume of chicks not just to manage supplies, LMIC said; weight data suggest that broilers are being fed to heavier weights, intermingled with lower weight time frames. For example, LMIC noted that weights for broilers in July were down about 1%, while June and August had increases of 4% and about 1%, respectively. September data showed heavier birds, but the latest week of data showed that birds were once again being slaughtered at lower weights.

Regarding prices, LMIC said the broiler industry has struggled with retail-level demand not being strong enough to hold up prices, with the exception of wings.

“Leg prices are down 33% in October, and the national composite price is off 14%," LMIC reported. "Breast meat prices, although above a year ago, are on their second year of prices that are 25% below the five-year average since midsummer.”

Looking ahead, LMIC expects the broiler sector to have another year of struggles.

“Although chicken at the retail level is well positioned in the meat case, the foodservice sector may not pick back up until mid-2021,” the center noted.

LMIC estimates 2021 broiler production to be even with a year ago, with limited profitability driving those production decisions in the first half of the year.