Thursday, February 29, 2024

Bird flu continues to impact poultry markets and prices

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By David B. Strickland

Poultry Times Staff

GAINESVILLE, Ga. — This year outbreaks of Highly Pathogenic Avian Influenza have set records for being the largest such outbreak in the U.S., causing record high egg prices, and caused devastation for farmers in 15 states, primarily Minnesota, the nation’s top turkey producer, and Iowa, the nation’s top table egg producer.

The impact of bird flu and its effect on poultry markets is noted in the USDA Economic Research Service’s most recent “Livestock, Dairy and Poultry Outlook.” The department notes the anticipated reductions of turkey and table eggs for this year.

“The forecast for table egg production for 2015 was lowered to 6.9 billion dozen, a decline of 5.3 percent from 2014 and a decrease of 334 million dozen compared with (May’s) forecast,” ERS says.

“The number of layer chickens affected by HPAI through early June was over 34 million, with a majority likely being egg layers,” the report notes. “The wholesale prices for one dozen large eggs in the New York region averaged $1.69 in May, about 30 percent higher than in May 2014. The sharp increase is likely related to supply constraints brought about by HPAI outbreaks.”

ERS adds that forecasted prices per dozen for the year are $1.60 to $1.66 per dozen eggs, which is an increase of 15 percent from last year.

The USDA Agricultural Marketing Service in its weekly shell egg demand indicator report for June 10, noted that, “demand for shell eggs remains very limited as buyers continue to assume a wait-and-see attitude in the face of record high prices. Wholesale shell egg prices have begun to drop sharply on moderate to heavy supplies and limited interest.”

AMS adds that, “resistance to record high egg prices has caused supplies to increase and prices have begun to correct.”

Production numbers are also being reduced for turkey facilities for 2015 and 2016.

“The second quarter 2015 production forecast (for turkeys) was lowered by 75 million pounds and is now 1.38 billion pounds, down 4 percent from the previous year,” ERS said. “The forecasts for the third and fourth quarters were each lowered 150 million pounds, down 7 percent and 6 percent, respectively. The combined reductions lower the 2015 forecast to 5.6 billion pounds, a reduction of 3 percent from 2014. The relatively small decrease is chiefly due to first quarter 2015 production being 7 percent higher than the previous year.”

Production of turkey meat in April, however, was 5 percent higher than in 2014, at 496 million pounds, ERS notes, adding that, “the increase resulted from a greater number of birds slaughtered despite a decline in the average live weight at slaughter.”

ERS also reports that the effect of AI on broilers has been in the export market, which has had a price-lowering impact on U.S. chicken prices.

“For the broiler industry the primary impacts of the AI outbreaks have been on the export sector, with numerous countries enacting full or partial bans on poultry products from the U.S.,” the report says. “What this situation has done is increase the amount of broiler products on the domestic market, boosting cold storage holdings and resulting in placing downward price pressure on a number of broiler products.”

Broiler production for the second quarter was raised by 25 million pounds for a total of 10.1 billion pounds, which is an increase of 5 percent from last year, ERS said. This resulted from increases in live weights and numbers of birds slaughtered.

Broiler exports remain approximately the same as last year, even with trade bans from some countries, because of increases to other countries, the report also noted. For April, 573 million pounds of broilers were exported, which is a decrease from March’s 603 million pounds, but remained a bit higher than in 2014.

“The impacts of the various trade bans are expected to reduce broiler exports substantially in the second half of 2015,” ERS says. “The total for 2015 is 6.8 billion pounds, a reduction of 50 million pounds from the previous forecast. The total for 2016 is 7.2 billion pounds, unchanged from the previous forecast, as normal trading patterns are expected to resume.”

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