US chicken and turkey production will decline from last year, particularly in the first half, as late-2020 production declines carry over into 2021, said the Livestock Marketing Information Center in a newsletter to Extension agents called the Livestock Monitor.
“The prevailing downward momentum for poultry production at the end of 2020 should extend into the first half of 2021,” the LMIC said.
The chicken and turkey industries during 2020 were struggling with the challenge of sizing up consumer demand for their products, similar to the rest of the economy, the LMIC said. Production plans were reigned in to keep inventories in line with consumption.
2020 TURKEY PRODUCTION DOWN
Broiler-type chicken production was up 1% from 2019 with all of the increase accounted for by larger average bird sizes, the newsletter said. Slaughter was up 4 million birds compared with total birds processed for the year of 9.2 billion.
Turkey production in 2020 was down 1% from the prior year as turkey slaughter declined by 2%, the LMIC said. Both industries registered year-over-year production declines during the last nine months of the year, mirroring the effects of the pandemic.
Broiler production during the first half of the year should come in below a year earlier, the LMIC said. Comparisons for the January-March quarter match up to an 8% increase that was recorded in the first quarter of 2020.
Leap year was a factor last year, as were average bird weights that were 2% heavier than in the first quarter of 2019. Average bird weights this quarter are expected to be up less than 1% from a year ago, helping to moderate the decrease in the number of birds harvested.
HATCHERY OUTPUT DOWN
Hatchery output in the last quarter of 2020, which will provide the source of birds to be processed this quarter, was down close to 2% from a year earlier, the LMIC said. Restrained hatchery output is a response to industry profitability that was declining from a year earlier in each of the four quarters of 2020, albeit holding at positive levels.
First-quarter 2021 turkey production should come in about 5% less than a year ago, the LMIC said. Comparison to a leap year is a factor, and average bird weights will be similar.
Turkey hatchery output during the last quarter of 2020 was down 6% from a year earlier, setting the template for birds to be processed this quarter, the LMIC said. Consumer demand was hit hard by pandemic restrictions to the foodservice industry in last spring and summer, but the holiday whole bird business was a profitable surprise. Consumption, however, fell 2% from the prior year holidays.
CATTLE, BEEF RECAP
Fed cattle trading this week was at $113 to $114 per cwt on a live basis, down $1 to $1.50 from last week. Dressed-basis trading was at $180, down $1 to $2.
The USDA choice cutout Thursday was up $0.85 per cwt at $233.88, while select was off $2.56 at $221.68. The choice/select spread widened to $12.20 from $8.79 with 94 loads of fabricated product and 32 loads of trimmings and grinds sold into the spot market.
The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.07 a bushel over the May CBOT futures contract, which settled at $5.32 1/2 a bushel, down $0.04.
The CME Feeder Cattle Index for the seven days ended Wednesday was $136.07 per cwt, down $1.10. This compares with Thursday’s Mar contract settlement of $135.10 per cwt, down $1.90.