Poultry Production Up To Compete With Beef

As of today, the USDA is confirming four more outbreaks of the H5N2 version of Highly Pathogenic Avian Influenza, bringing the total number of outbreaks to 201, or 44.67 million birds.

But despite that and the flock depopulating that must accompany each case, the US poultry industry continues to crank up production, an ominous move to some cattle market analysts.

And the virus isn’t slowing down as clinicians expected with warming spring temperatures.  The latest confirmed outbreaks involved three Minnesota turkey facilities and one in Iowa, and there are two more unconfirmed cases in Iowa.

Each case results in hardship for the families and companies that own the birds and facilities.  The ripple effect also harms feed producers, truck drivers and employees.  The corn markets have been pressured by a slowdown in feed consumption.

There also are expenses in depopulating a flock and with disposing of the dead birds.  In addition, the buildings must be cleaned thoroughly and remain empty for three months.

Some experimentation with shrink-wrapping the building and then heating the interior to 130 degrees for five hours is taking place, but the process so far has not been approved.




The problem for cattle producers is that the disease so far has concentrated on turkey farms and table egg-producing facilities.  To be sure, broiler producers can, and have, been affected, but not to the same extent.

And the industry is setting more eggs into incubators and placing more chicks into growing buildings, which means increased broiler production that directly competes with beef at the consumer level.

The USDA’s Broiler Market News Report from Friday showed that young chickens slaughtered for consumption during the week ended May 23 totaled 165.207 million head with an average weight of 6.03 pounds, up from 157.944 million with an average weight of 5.79 pounds in the same week a year earlier.  For the year to date, total chicken slaughter has totaled 3.136 billion head, up 3% from 3.057 billion for the same period in 2014.

The total weight of all those birds in the latest week was 757.111 million pounds, up 8.9% from 695.017 million in the same week a year ago.

Year-to-date chicken production was 14.469 billion birds, up 7% from 13.536 billion in the year-ago period, the USDA said.

On top of that, dozens of countries have restricted the states from which poultry or poultry products can be exported to their shores.  The unexportable production has to go somewhere.

Yet production continues to rise.  In the latest week, the USDA reported broiler-type egg sets up 2% from a year earlier to 219 million.  The USDA also reported chicks placed up 3% at 180 million.

How much longer the industry will continue to ramp up egg sets and placements is debatable.  The benchmark Georgia Dock price is record high, but wholesale prices for boneless/skinless chicken breasts appear to have peaked seasonally.  And wholesale prices for chicken leg quarters in the Northeast continue to fall.




Cash cattle markets Monday were quiet.  No bids or offers were heard, but analysts estimated early asking prices would be near $163 to $164 per cwt on a live basis and $258 to $260 on a dressed basis.

Cattle traded Friday at $160 per cwt on a live basis, down $1 from the bulk of the previous week’s action, and at $252 in Nebraska’s dressed market, down $3 from the bulk of the previous week’s trade.

Beef prices Friday were down with the USDA choice cutout at $254.28 per cwt, down $0.71, and the select cutout at $244.62, off $0.79.  Volume was light to moderate with 91 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Friday was $221.71, up $0.05.