Markets in 60 seconds: 8/12/13

Markets in 60 seconds: 8/12/13

Chicken slaughter: Chicken slaughter continues to run ahead of last year in terms of both number of birds and ready-to-cook (RTC) volume. Slaughter weights are running just slightly larger than last year, roughly 0.1 lb., on average. Average weights last week were 5.81 lb. While the number of birds slaughtered year to date is only 0.68% larger than last year, RTC volume is roughly 3.16% larger. Turkey slaughter, on the other hand, is running behind last year in terms of birds processed, but RTC volume is slightly larger. While the number of birds processed this year is off 1% from 2012, RTC is up 0.06%.

Chicken opportunities: Chicken could be poised to siphon additional demand away from beef, particularly if beef prices push above current near-record levels in the wake of Tyson deciding to reject cattle fed zilpaterol. At midyear, chicken demand looked pretty healthy, running 3% ahead of year ago, according to the Paragon Economics consumer demand index. Economist Steve Meyer noted last month that the limiting factor for meat and poultry demand growth in general was a solid, but not robust, macroeconomic situation in the U.S. Real personal disposable income, he pointed out, has not grown appreciably since 2010. While the real retail price of beef has increased 18% during that period and pork has increased nearly 16%, the real price of chicken at retail was virtually the same in June as it was in the fourth quarter of 2008. Last month, USDA reported a new record for the composite chicken price, however, at $1.992/lb. retail, roughly 4.3% higher than a year ago. Meyer concluded that while beef hasn't lost much ground to pork in relative terms, the sector faces a much different challenge relative to chicken. While Choice beef prices gained 12.8% from average 2008 prices, the composite chicken price is up only 5.1%, "indicating that the chicken sector has indeed gained an advantage since feed costs began rising."

Volume:85 Issue:32

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.