The recently published U.S. Department of Agriculture’s January “Livestock, Dairy, and Poultry Outlook” from the Economic Research Service is available here.
Preliminary broiler production data indicated slightly lower December production than previously forecast, leading the fourth-quarter estimate to be lowered 25 million pounds. First-quarter 2017 production was slightly increased due to recent strong hatchery data and an apparent recovery in bird weights during the fourth quarter.
Exports in November were lower than expected. The broad trade-weighted index for the U.S. dollar reached its highest levels in November and may have been a contributing factor in the slower-than-expected export growth. In late December, the dollar stood just short of its highest level since the broad trade-weighted index series started in 1995. Expectations for 2016 exports have been lowered 40 million pounds.
The export forecast for 2017 remained unchanged. There is uncertainty on the export demand effects of avian influenza outbreaks in several important European and Asian countries, including The Netherlands, France, Germany, Japan, and South Korea. The United States may experience higher export demand from markets such as South Africa and the Philippines, where trade restrictions have reportedly been put in place. It is not yet clear to what extent this will occur, since many trade restrictions may be applied only to the regions experiencing an outbreak, and unaffected regions in the same vicinity may continue exporting.
Weekly prices for whole broilers (national composite) increased slightly above expectations as prices remained above 2015 levels for the last 8 weeks of the year and reached 87 cents per pound for the week ending January 13. The first-quarter forecast was increased slightly to 79-83 cents per pound, and the 2017 forecast is now 80-86 cents per pound.
Weekly prices for boneless/skinless breast meat remained below a dollar per pound throughout December as the typically lower seasonal pricing held. The December price for breasts with rib meat atypically outperformed the boneless/skinless variety by 5 cents, whereas a spread in the opposite direction is far more common. The favorable December price spread for boneless/skinless breasts has been declining for more than 10 years.
