E.R.S. revises broiler production estimate

by Keith Nunes
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WASHINGTON — The Economic Research Service of the U.S. Department of Agriculture revised its estimate of U.S. broiler production downward for the year. Broiler meat production is expected to be below the previous year in the first and second quarters, but above for the third and fourth quarters. Total broiler meat production for 2007 is forecast at 35,575 million lbs, a decline from 35,753 million lbs the previous year. It is the first decline in production since 1973, according to the agency.

The E.R.S. estimated broiler production for the first quarter of 2007 would be 8.7 billion lbs, a decline of 3.2% compared to the same period during 2006.

The estimate of broiler cold storage holdings at the end of the first quarter of 2007 was reduced to 610 million lbs, 29% lower than the previous year and down 90 million lbs from the previous estimate. The reduction comes as the result of lower production forecasts and continued strength in the general economy.

At the end of February, cold storage holdings of almost all broiler products were down, with stocks of dark meat products down the most compared with a year earlier. Products such as leg quarters, drumsticks, and thighs were all at least 44% lower than at the same time in 2006. Ending stocks forecasts for the second, third, and fourth quarters of 2007 also were lowered.

In March, the E.R.S.’s 12–city price for whole broilers averaged 79c per lb, up 27% from the previous year. Prices for most other broiler products were up significantly compared with a year earlier. In the first half of 2006, prices for many broiler products were depressed by higher production and cold storage holdings.

Prices for boneless/skinless breasts were reported at $1.52 per lb in March in the Northeast market, a 53% increase over the previous year. Also, March prices for leg quarters, wings, and thighs were 130%, 50%, and 79% higher than the previous year. With lower broiler production in five of the last six months and lower stock levels, broiler prices are expected to remain considerably higher than in the previous year, especially in the next one to two quarters.

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