By David B. Strickland
Poultry Times editor
dstrickland@poultrytimes.com
WASHINGTON — Recent broiler production has been forecast higher than expected; table eggs are being revised down; and turkey production was seen at numbers slightly less than year, the USDA’s Economic Research Service notes in its latest “Livestock, Dairy and Poultry Outlook” report.
Broilers
“May broiler production came in higher than expected at 3.6 billion pounds, a year-over-year increase of 2.2 percent (adjusted for slaughter days),” the ERS report said. “This increase was driven largely by average live bird weights, which reached a record 6.45 pounds (2 percent higher year-over-year), while slaughter increased by 0.2 percent. Preliminary weekly slaughter data imply that the increase in May bird weights was driven by higher weights in both small (6.25 pounds and below) and large birds (6.25 pounds and above) weight categories, as well as an increase in the proportion of large bird production.”
The department also noted that the increase in bird weights could stem from disruptions in processing that occurred in the spring; but added that the industry has responded fast to the change in numbers.
“The year-over-year increase in slaughter — albeit slight — points to the ability of the broiler industry to recover quickly,” ERS said. “Based on higher-than-expected May production, the second quarter production forecast was increased to 10.9 billion pounds.”
Production forecast for 2021 was increased by the department to 45.175 billion pounds, which approximately mirrors the 2020 forecast, but year-on-year growth, based on May’s pullet placements, was noted at 1 percent growth for next year.
“Pullet placements have been consistently higher . . . since September 2019, but May data reflects a 6.6 percent decrease, suggesting that producers may intend to reduce or slow the rate of expansion of the broiler breeder flock going into 2021,” the report said.
Export volumes for broilers in May were approximately 592 million pounds, a decrease of about 4.5 percent from last year, ERS added.
“Shipments decreased year-over-year to several key markets, including Mexico (-37.7 million pounds), Cuba (-13.1 million pounds), Angola (-11.8 million pounds), Hong Kong (-10.4 million pounds), Vietnam (-8.1 million pounds) and South Africa (-8 million pounds),” the report said. “Fortunately for the U.S. broiler industry, higher shipments to China (plus 82.4 million pounds) and Taiwan (plus 14.4 million pounds) helped to partially offset these sizeable decreases. Based on lower-than-expected May export volumes, the second quarter export forecast was lowered to 1.75 (billion) pounds.”
ERS added that for the year U.S. broiler exports are seeing a 5.2 percent increase, being led by the larger shipments to China.
“Without China, it is likely that U.S. exports would see little if any growth in 2020,” the report noted. “Chicken import demand from China has increased significantly due to a protein deficit caused by African swine fever. Based on expectations that shipments to China will continue to underpin U.S. broiler export volumes, the export forecast for the outlying quarters remains unchanged.”
Eggs
The number of the table egg layer flock in May was approximately 321.6 million, which is noted at 4.5 percent less than last year, the report said.
“The reduction in the layer flock can largely be attributed to the sharp decrease in foodservice demand for processed eggs, which led egg processing companies to reduce their flocks,” ERS noted. “Meanwhile, retail demand remained relatively elevated in May suggesting that shell egg companies producing for the retail sector were unlikely to have made significant reductions to their laying flocks. The June 1 layer inventory points to another likely month-over-month decrease in the layer flock.”
Also, the rate of table egg lay continued a second month of decreases in May at 78.8 eggs per 100 layers per day for the month, the department added. This is 2 percent less than last year.
“The decline in the lay rate was driven by an increase in the share of layers being molted,” the report said. “Layers undergoing molting are included in the total layer inventory but product fewer if any eggs during this time, pulling down the average number of eggs per layer.
“Retail demand was still relatively strong in May, so producers were likely seeking to expand production of shell eggs for retail. As it takes at least 5 months to add new hens to the laying flock before they can produce eggs, shell egg producers were likely molting more birds to retain them for additional laying cycles in order to increase production. Also, given the level of market uncertainty stemming from COVID-19, it is possible that producers were molting more birds — with the option of retaining or culling molted birds as market conditions necessitated — in the event that demand increased suddenly. However, it is expected that as the share of birds being molted decreases, lay rates will likely recover.”
Table egg production for May was 6.4 percent less that last year, ERS noted. The production for the month was forecast at 655 million dozen. The estimate for the second quarter of 2020 was also reduced to 1.94 billion dozen.
“In the second half of the year, it is expected that the layer flock will gradually expand consistent with seasonal patterns as demand increases heading into the holiday season but will likely remain below year-earlier levels,” ERS said. “A smaller expected layer flock was the basis for decreasing the second half production forecast to 3.9 (billion) dozen. In sum, 2020 table egg production is forecast at 7.98 (billion) dozen, a decrease of 3 percent relative to 2019.
“The 2021 production forecast was decreased by 8.13 (billion) dozen, an increase of 2 percent relative to 2020 forecast production.”
Export shipments of U.S. eggs and egg products were forecast at 25.5 million dozen for May, which is 12.1 percent less than 2019, ERS said, adding that shell exports were at a 30 percent decrease year-over-year.
“The decrease in total egg and egg product exports was due to significantly lower year-over-year shipments to Canada (-3.2 million dozen), Mexico (-1.7 million dozen) and Hong Kong (-684,000 dozen), which, when combined, represented 61 percent of May U.S. egg exports. Volumes increased year-over-year to Japan (628,000 dozen), Denmark (601,000 dozen), South Korea (409,000 dozen) and the United Arab Emirates (312,000 dozen),” ERS said.
However, the report added that, except for May 2020, export volumes for U.S. eggs have been higher year-over-year every month since June 2019. Another factor to this, it notes, were the record-high wholesale egg prices in March and April, but now that prices have returned to average it is anticipated that shell eggs will again be sought after by foreign markets. The agency notes that the egg export forecast for the second quarter of the year has been increased to 83 million dozen.
Turkeys
“May turkey production totaled 427.5 million pounds,” ERS reported. “Although this was 6 percent higher than April on a per day basis, it was about 5 percent lower than last year. May is the second month of year-over-year decline. Net poult placements, which have been below 2019 levels so far in 2020, fell to 19.3 million poults in May. This is a year-over-year decline of 10.8 percent, and the lowest number of poults placed in a month since September 2015.”
Turkey production for the second quarter has been revised by ERS to 1.36 billion pounds as based on department data from May. Production for the third quarter is being forecast at 1.4 billion pounds, and for the fourth quarter, 1.45 billion pounds. This totals for the year at approximately 5.679 billion pounds. This marks a 2 percent decrease from last year.
For 2021, the turkey production forecast is at 5.77 billion pounds, an increase of 2 percent from this year, the department added.
“Turkey exports totaled 38.5 million pounds in May, 19.5 million pounds below a year ago,” the report said. “Much of the decline is accounted for by Mexico’s importing 12 million pounds less than a year ago. Mexico’s share of U.S. turkey exports remained similar to the previous May at 60 percent. China, which was not importing poultry from the U.S. last year, imported 4.1 million pounds in May, making up almost 11 percent of the total. The Dominican Republic imported half a million pounds more in May than a year ago. There were also decreases in shipments to South Africa and Benin.
“The 2020 turkey export forecast was revised down, reflecting May data and expectations for lower production. 2020 exports are forecast at 539 million pounds, a 16 percent decrease from 2019. The 2021 export forecast was also revised down to 555 million pounds, which would be a 3 percent year-over-year increase from the 2020 forecast.”
The ERS adds that the frozen turkey price average for wholesale turkey hens was $1.03.7 per pound for the second quarter of this year. It notes that the 2021 forecasted average price has been adjusted up to approximately $1.05 cents per pound.
