ERS Forecasts Protein Production Increases for 2017

Published by permission from Poultry Times; originally printed June 23, 2016.

Written by David B. Strickland

WASHINGTON — All animal protein production is expected to increase in 2017, notes the USDA’s Economic Research Service in its latest “Livestock, Dairy and Poultry Outlook” report. Total poultry is anticipated to be up 2.5 percent next year, compared to 2016, the agency notes. Red meat is forecast at 3.3 percent more, and for total red meat and poultry, an increase of 2.9 percent.

Broilers Broiler production forecasts for this year are holding, the report says. “First quarter broiler production was slightly below forecast, but weekly broiler production in April was quite strong according to preliminary slaughter data,” ERS says. “Production growth was led by higher weights, but head counts were also up significantly compared to last year. Broiler egg sets in April were mostly down from last year, however, and appeared tepid on a year-to-date basis. Therefore, the production forecasts were maintained for outlying quarters in 2016.” For 2017, the department is looking for 2.5 percent production growth for broilers, but says that it’s based on an “incomplete recovery in exports to pre-avian influenza levels, along with relatively weak broiler prices.” “A moderate increase in feed costs will also weaken producer margins, although grain prices are expected to remain at relatively low levels,” ERS says. Broiler meat wholesale prices were trending up in April with leg quarters leading; however, prices remained relatively low, the report said. “The national composite price for whole birds at wholesale reached its seasonal low during February and has increased fairly consistently since then,” ERS notes. “With a relatively strong increase in prices during April and May, the whole broiler price forecast was raised for the outlying quarters of 2016, with an annual average of 86 cents to 90 cents per pound.” For next year, the agency reports a forecasted average price of 84 cents to 91 cents per pound, adding that export growth will partly offset production increases.

Turkey Production of turkey meat in 2017 is being forecast at an increase of 6.1 billion pounds, which is a 3 percent increase over 2016 numbers, the department says. “The production increase is forecast as a result of a combination of both an increase in the number of birds slaughtered and slightly higher average live weights at slaughter,” ERS notes. “The general market for turkey products is expected to give turkey producers an incentive to expand production due to relatively small increases in feed prices, gains in per capita real disposable incomes and continued declines in unemployment.” Increases in turkey exports may also give support for higher prices, the report said, adding that this forecast may be, in part, countered by beef, pork and chicken production growth. “In first quarter 2016, turkey meat production was 1.43 billion pounds, up 0.4 percent from first quarter 2015. The small increase in turkey meat production was the result of a combined fractional increase in the number of turkeys slaughtered due largely to the extra day in February and slightly higher average live weights compared to the same period in 2015,” ERS said. “With only a small increase in net poult placements during first quarter 2016, the forecasts for turkey meat production during the remaining quarters of 2016 were lowered slightly,” the report says. “The forecast total for 2016 is now 5.9 billion pounds, about 6 percent higher than the HPAI (highly pathogenic avian influenza)-reduced production of 2015.”

Eggs For the first quarter of this year, table egg production is down 3 percent from the same time in 2015, totaling 1.8 billion dozen, the department said. “Most of the decline can be attributed to the fact that the table egg flock averaged 3 percent smaller during this period (298 million), but the average rate of lay for the table egg flock was also down fractionally,” ERS notes. “The table egg flock is forecast to continue to expand, and the production forecast for the second quarter 2016 was increased by 25 million to 1.78 billion dozen. However, the current low wholesale egg prices are forecast to put downward pressure on production in the second half of the year, although production is forecast to be significantly higher than the HPAI-reduced production of the second half of 2015.” For 2017, table egg production is expected to continue an expansion at a modest pace. The department is anticipating total table egg production for 2017 at 7.3 billion dozen, which is an increase of 2 percent from this year. “Hatching egg production is forecast to continue to expand in both 2016 and 2017, chiefly to supply additional chicks for the broiler industry,” ERS says. “In 2016, total production is forecast at 1.13 billion dozen, 2 percent higher than the previous year, and production is forecast to expand an additional 2 percent in 2017 to 1.16 billion dozen.”

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