January Chicken Slaughter Down

Chicken slaughter during January was down 3% from December and down 4% from a year earlier as companies took advantage of the birds’ short life spans and cut production in the face of declining returns.

That is something cattle producers can’t do because of the extended life spans and reproduction cycles of the animals.  These extended life spans account for long periods of increasing or decreasing slaughter and beef production.  In the three years it often takes from expansion decision to market steer, chicken producers could go through 12 up or down phases.

A look at chicken production is important to cattle producers because chicken competes directly with beef at all consumer levels.  The USDA’s February World Agricultural Supply and Demand Estimates report calculated per capita chicken consumption last year was 64.9% greater than beef at 88.9 pounds versus 53.9 pounds.




The USDA’ National Agricultural Statistics Service Thursday released its monthly poultry slaughter report showing total chicken slaughter in January at 709.5 million birds, down 22.628 million, or 3.09%, from December’s 732.1 million and down 27.090 million, or 3.68%, from 736.6 million in January of 2015.

That produced 3.059 billion pounds of chicken, down 63.529 million, or 2.03%, from 3.122 billion in December and down 28.0 million, or 0.91%, from 3.087 billion a year earlier.




The national composite weekly wholesale price of broilers, or ready-to-cook chickens, last week was 81.77 cents a pound, according to data from the USDA’s Agricultural Marketing Service.  This was down 0.18 cent, or 0.22%, from 81.95 cents the week before.  More importantly, it was down 7.73 cents, or 8.64%, from this year’s high of 89.5 cents in the second week of January and shows a general decline.

Prices this year have tended to follow last year’s pattern more than the 2010-14 average but now are below both.  Weekly broiler prices crossed below the five-year average in July last year and continue to struggle to keep up.

Weekly wholesale chicken prices have a strong tendency to begin rising at this time of the year, usually peaking about the last week of May.  Last year’s peak came the first week of April.

The mid-winter to late-spring price rise correlates to the onset of what is considered to be the heart of the grilling season for consumers.

However, this year’s prices for breasts and leg quarters in the Northeastern markets are well below a year ago and the previous five-year average, USDA’s AMS said.  Prices for smaller, foodservice style chickens are holding up, but retail buyers aren’t stepping up yet, something that might be concerning to the chicken companies and causing them to trim production.




Cash cattle markets in the Plains Wednesday remained fairly quiet with little trading reported.  The USDA reported 267 head of steers and heifers sold so far this week at $127.47 per cwt up to $135 on a live basis, but this is not enough to establish a market.  On a dressed basis, the USDA reported 365 head this week at $210 to $210.41.

Cattle last week traded at $132 to mostly $134 on a live basis and around $208 to $210 dressed.

Packer bids were reported in the Plains at $134 to $135 live with asking prices around $138 to $140.  Dressed bids were about $210 per cwt against asking prices of $215.

The USDA reported higher wholesale beef prices again Thursday, with choice up $1.04 per cwt at $218.76, and select up $0.26 at $213.98.  The choice/select spread widened to $4.78 from $4.00, and there were 80 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven years ended Wednesday was $158.67 per cwt, down $0.02.  This compares with Mar’s Thursday settlement of $159.10, up $1.15.