By David B. Strickland
Poultry Times staff
WASHINGTON — Higher broiler producer returns are forecast to drive a small increase in production for the first half of 2018, notes the USDA’s Economic Research Service in its December “Livestock, Dairy and Poultry Outlook” report.
“First half broiler prices are forecast to decline by 6.8 percent,” ERS said. “For turkeys a modest recovery in domestic demand and exports drives small increases in production, but low prices continue to underscore the slow pace of demand recovery relative to supply levels. First half turkey prices are expected to fall by 9.8 percent . . . For eggs, expected first half 2018 price increases reflect the year-earlier low prices that prevailed due to record-level supplies. Production growth in the first half of 2018 is expected to be moderate as producers continue to recover from margins that were relatively low until recently.”
The broiler market is noted as stable by the ERS, and price projections were reduced slightly based on the most recent data by the agency.
“October broiler meat production was 3.7 billion pounds, about 8.5 percent higher than a year earlier, in part because there was an additional slaughter day,” the report said. “Bird weights were up 1.3 percent above last year, still reflecting the relatively cool Southern summer that supported bird growth, and 6.9 percent more birds were slaughtered. Projected production was not revised for either the fourth quarter or for 2018.”
Production levels for broilers in October increased stocks in cold storage facilities by 49 million pounds from the previous month, ERS noted. Year-end stocks were increased to 825 million pounds for 2017, and 790 million pounds estimated for 2018.
“Broiler exports in October were 642 million pounds, about 15 percent above last year,” the report said. “The hefty growth compensated for the previous month’s much weaker export level. Buyers may have taken advantages of lower dark meat prices in October, as prices were down 14 and 7 percent, respectively, for whole legs and leg quarters on a month-over-month basis in the Northeast market.
“Export growth was strongest to Mexico, Cuba, Taiwan and South Africa.”
During October, turkey production reached 554 million pounds, which is 7 percent more than the same month last year, ERS said.
“The increase in October marks a modest turnaround following five of the last six months of negative year-over-year growth on a per day slaughter basis,” the report added. “With wholesale prices continuing to run below historical averages, the bump in October may simply reflect fresh market demand for the Thanksgiving holiday.”
The report also noted improvements in turkey hatchery reports for October. Eggs hatched and placements were increased 3 percent for the month, the agency said.
“October turkey exports were 23 percent higher than a year earlier, totaling 64 million pounds,” ERS said. “This was the highest number for the month since December 2014, when HPAI (highly pathogenic avian influenza)-related trade restrictions impacted the market.
“Mexico remains the largest destination for U.S. turkey shipments, with 38 million pounds shipped in September, or 59 percent of all U.S. shipments. Total exports for 2017 are expected to reach 623 million pounds, 9 percent more than in 2016. Exports are expected to grow further in 2018 to 655 million pounds, a 5 percent increase over 2017.”
Production of table eggs reached 639 million dozen in October, the report said. This number is a slight decrease from 2016, attributed to fewer eggs per layer for the month. The egg production forecast for the fourth quarter of 2017 was reduced by 25 million dozen.
“Future production expansion of table eggs has become more likely, however, in line with recently improving incentives that have resulted from higher margins on strong prices,” ERS said. “The number of egg-type chicks hatched in October suggested that producers were looking to expand their flocks; the November hatch is also likely to reveal flock expansion, as indicated by eggs in incubators on the first of the month.
“Projected 2018 egg production was increased 30 million dozen.”
Egg and egg product exports for October were noted at 30 million dozen, the report said. This is an increase of 15 percent from 2016.
“Continuing growth in shipments to Asia drove the export growth, with 1.9 million dozen more exports to both Japan and Hong Kong and (900,000) more to South Korea,” ERS said. “Canada was shipped 2.6 million dozen more, while Mexico was down 1.2 million dozen.
“The 2017 export projection was increased 10 million dozen on higher fourth quarter expectations.”