Wednesday, February 21, 2024

ERS: Prices, production impacted from HPAI outbreaks

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By David B. Strickland

Poultry Times staff

dstrickland@poultrytimes.com

WASHINGTON — The impact of this year’s highly pathogenic avian influenza outbreaks continues to be factored into how it is affecting the nation’s poultry production.

In its latest “Livestock, Dairy and Poultry Outlook” report, the USDA’s Economic Research Service notes that exports of broilers, turkeys and eggs, all have seen a decline. In production, turkeys and eggs declined, but broilers did not see a vast reduction. This has resulted in a price reduction in broilers, price increases for eggs and varying prices for turkeys, ERS notes.

“Moving forward, price movements will depend on the gradual resumption of trade to a number of countries and restart of production at HPAI-impacted facilities,” the report said.

Eggs

“The HPAI outbreak severely impacted egg production, particularly in Iowa, the largest egg-producing state. The result was lower production that more than offset the decline in exports and resulted in a surge in egg prices,” ERS said. “The higher prices have led a number of countries to begin exporting eggs to the United States.”

As of Aug. 1, the total table egg layer flock in the U.S. was 271 million, which marks an increase from the July 1 total of 270 million, the report noted. Production of table eggs in July was 544 million dozen, a decrease of 12 percent from 2014. Hatching eggs were at 95 million, which was a 4 percent increase from last year.

“The 2015 forecast for table egg production was reduced by 50 million dozen to 6.8 billion dozen while the 2016 forecast remains unchanged at 7 billion dozen,” the department said. “The forecast for hatching egg production was lowered by 10 million dozen to 1.1 billion dozen, while 2016 hatching production forecast remains at 1.1 billion dozen.”

Prices “far above normal” have been seen for table eggs as a result of the lower production, ERS said, adding that “the price of a dozen large grade A eggs in the New York market averaged $2.74 in August, up 104 percent from a year earlier. The 2015 forecast for grade A large eggs in the New York market stands at $1.99 to $2.03 per dozen and is expected to average $1.64 to $1.78 in 2016.”

Broilers

ERS notes that the spring HPAI outbreaks affected broiler stock levels and prices.

“Growth in production plus lower exports raised stocks and reduced prices at the wholesale level,” the report said. “Although the downward pressure on prices was not equally spread over all broiler products, the aggregate impact affected the entire sector. The falling prices and rising stock levels, in turn, have given broiler integrators a strong incentive to begin slowing down broiler production.”

For the second half of the year, broiler production was lowered by 200 million pounds — 75 million for the third quarter and 125 million for the fourth quarter, the department noted. For the second half of 2015, the anticipated broiler production is 20.3 billion pounds, which remains a 3 percent increase from 2014.

“The reductions are chiefly the result of a lower number of chicks placed for growout, which has been gradually decreasing compared with the same period last year,” ERS says. “However, the decline in chicks for growout is expected to be partially offset by continued growth gains in average bird weights.”

For 2016, broiler production is looking to be approximately 41.1 billion pounds, the department said. This is a decrease of 275 million pounds from previous reports.

At the end of July, broiler product stocks were at 729 million pounds, 38 million pounds more than at the end of June and an increase of 22 percent from 2014, ERS said. For the five months prior, broiler stocks were between 21 percent and 32 percent more than last year.

For prices, in August, whole birds decreased to 83 cents per pound. “Until slowing production growth and gradually increasing exports can bring broiler supplies more into line with demand, lowering cold storage levels, prices are expected to remain well below the previous year,” the report said.

Turkeys

For turkeys, “lower production raised prices, but this was partially offset by declines in exports . . . the impact was not uniform among the different turkey products, but prices for the products are generally higher,” ERS notes. “Production was reduced due to the number of birds lost to HPAI, but producers are trying to bring production back to earlier levels.”

In July, turkey meat production was at 448 million pounds, a decrease of 11 percent from 2014, the department said. Production forecasts for the second half of the year have been reduced by 65 million pounds to an estimated total of 2.75 billion pounds. This is 8 percent lower than in 2014. The average liveweight at slaughter is noted to be 29 pounds.

“The drop in average weights was likely the result of processors bringing birds to slaughter now that normally would be slaughtered slightly later in the year,” ERS said. “Turkey liveweights have been trending higher over time and year-over-year decline is relatively rare; one this size has not happened in the last 15 years.”

The price for whole, frozen hen turkeys in August was $1.27 pound, which is 17 cents more than in 2014, the report added.

“Prices for frozen, whole hen turkeys on a year-over-year basis have been higher than the previous year for the past five months after being slightly lower than the previous year in first quarter 2015,” ERS said. “The forecast for whole hens in the third and fourth quarters are for prices to continue to be well above year-earlier levels. For 2016, prices are forecast to be higher in the first half of the year, but then to move lower than the previous year in the second half.”

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