Chicken broiler production slows heading into 2019

The U.S. Department of Agriculture reported chicken broiler production began to slow in October with nearly 3.8 billion pounds processed, up fractionally over the same period in 2017. The agency said chicken slaughter numbers were down 0.1% while average bird weights rose 0.5% from a year ago.

October was the first month since January 2018 that average daily slaughter rates fell below 2017 levels. That said, production data pointed to higher quarterly production than previously expected. The report notes weekly chick placements began slowing in August and turned negative in September after increasing each month for the first half of the year as poultry companies began tightening production against weaker domestic demand.

USDA analysts said continued year-over-year decreases of eggs set and chick placements in October and November suggest that the trend of decreased slaughter is likely to continue into early 2019. Meanwhile, year-over-year growth of average live weights appears to be slowing as processors scale back large-bird slaughter, which primarily goes into food service.

First-half 2019 forecasts were decreased by 120 million pounds to 21.3 billion pounds based on negative projected growth in birds slaughtered.

USDA said broiler exports reached 670 million pounds in October, the highest volume exported since late 2013. The surge in shipments was driven by strong exports across all product categories. In particular, increasing shipments of frozen legs and leg quarters contributed significantly, reaching nearly 407 million pounds in October. On average, these cuts represent 57% of export volumes; in September and October, this percentage share climbed to over 60%.

Broiler exports for 2019 are expected to increase by 40 million pounds to 7.08 billion pounds, according to the USDA.