Chicken, egg production expands in October

Chicken, egg production expands in October

Solid demand and better profitability fuel 2-4% increase in chicken and egg production in October.

Chicken, egg production expands in October
GIVEN a relatively short time needed to expand production, it is not terribly surprising that chicken and egg production is already trending higher.

The turkey sector is the exception to the poultry industry's current trend of solid profits underpinning increased production efforts.

According to the U.S. Department of Agriculture's monthly "Poultry Slaughter" report, October chicken production totaled 3.5 billion lb. of ready-to-cook product, up 4% from the same month a year ago. Production was 12% larger than September 2013, and year-to-date production was up 2% compared with the first 10 months of 2012.

Broiler hatchery data have been pointing to increased production for quite some time. Eggs set for the week ending Nov. 16 were up 2% from the corresponding week last year, and year-to-date broiler placements were up 1% from a year ago.

Heavier birds are also part of the equation as relatively cheap feed is allowing growers to put a little more liveweight on their birds. Young chickens slaughtered during October averaged 6.0 lb. per bird, up 1% from last year; the average slaughter weight of mature chickens was up 2%.

In its monthly "Chicken & Eggs" report, USDA found that breeders hatched 736 million broiler-type chicks in October, up 1% from last year; the number of eggs in incubators as of Nov. 1 was actually up 4%, indicating plans to hatch even more birds moving forward.

As with chicken production, egg production during the month of October was up 2% from last year at 8.13 billion eggs (Figure 1). Production included 7.06 billion table eggs and 1.07 billion hatching eggs.

Here is where expansion plans really are starting to show: Egg-type chicks hatched during October were up 13% from last year, and the number of eggs in incubators was up 15% from last year.

The number of egg-type laying hens on hand as of Nov. 1 totaled nearly 290 million, up 1% from last year. The number of hens producing hatching eggs, on the other hand, was up 5-6% compared with last year, again pointing toward future expansion possibilities (Figure 2).

Rate of lay per day also was up 1% from last year.

Turkey production has been the one segment of the poultry industry bucking the expansion trend. According to monthly slaughter data, the preliminary total liveweight of all federally inspected turkeys during the month of October was down 11% from last year.

With slaughter weight up 3% at 29.9 lb. per bird, ready-to-cook production for the month totaled 517.4 million lb., and accumulated production for the first 10 months of the year totaled 4.9 billion lb., down 2% from last year.

According to USDA's monthly "Cold Storage" report, total poultry supplies in commercial freezers as of Oct. 31 were 6% smaller than the previous month, although still 3% larger than last year. Chicken stocks were up 8% compared with last year, while turkey stocks were down 5%, indicating that solid pre-holiday demand pulled down inventories in the face of lighter production.

The chicken supply situation will be important to watch moving forward as stocks are still relatively large — and apparently growing. While stocks appear to be relatively well balanced, increased production could put a larger-than-expected crimp in prices in early 2014.


Market recap

Chicken prices held steady last week, with a Georgia dock price for whole birds remaining at $1.045/lb. Parts prices fluctuated slightly over the past two weeks, but boneless/skinless breast meat has averaged somewhere near $1.87/lb. over the past three weeks, leg quarters have been slightly more than 51 cents/lb. and wings have finally settled near $1.24/lb.

Whole-bird prices are 7-8 cents better than last year and appear likely to stay near those levels for the short run.

Turkey prices, likewise, held steady throughout November, ranging mostly between $1.00 and $1.15/lb. Export demand in the parts complex remains fairly strong, and the holiday season has allowed a sharp drawdown in frozen inventories.

With strong holiday demand, egg prices have increased sharply over the past few weeks, even in the face of increased production. Midwest warehouse prices last week were up 12 cents/doz. for large eggs, mostly $1.50-1.53/doz.; those prices were up more than 40 cents from the start of the month.

Egg inventories had fallen sharply through Nov. 25, according to USDA data. Warehouses held 956,000 cases of table eggs, down nearly 15% from the prior week and down roughly 200,000 cases from Nov. 1.

Volume:85 Issue:49

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