Recent weekly broiler hatchery data indicates  “strong divide” between the number of chicks being placed for growout and the level of chicks that may be available in the next several weeks, according to the Livestock, Dairy and Poultry Outlook report today from USDA’s Economic Reserach Service (ERS).  Over the last five weeks (October 6 through November 3), the number of chicks place for growout averaged 154.4 million, 2 percent higher than in the same period in 2011.  Over the last several months this 5-week moving average has changed from being significantly lower than the previous year to becoming higher.  However, recent changes in the number of eggs placed in incubators point to a future trend of chicks placements being lower than year-earlier levels, ERS noted.  Over the last five weeks, the number of eggs placed in incubators was 1 percent below the same period in 2011.

Broiler meat production in 2013 is forecast to decrease 1 percent from 2012.  In 2013, the decline in broiler meat production is expected to come mainly from fewer birds being slaughtered, as the birds’ weights are expected to be close to or slightly higher than in 2012.  Broiler companies are expected to have a slight contraction in production due to the combination of continued high prices for corn and soybean meal and expected relatively modest growth in broiler prices.

Retail beef prices appear to have reached at least a temporary upper limit, seemingly unable to break much above $5 per pound (Choice beef), ERS reported.  Total red meat production for 2012 is projected slightly lower than in 2011, as is per capita disappearance. While poultry per capita disappearance was down during the first half of 2012, it is projected to be down only about 2.4 percent for all of 2012, with total red meat and poultry per capita disappearance down less than 1.5 percent.  Relief for either cattle feeders or beef packers looks unlikely over the coming year, except at the expense of one or the other, until higher cattle prices are matched by higher retail beef prices, feeder cattle prices decline, and/or lower corn prices result in feed costs low enough to allow cattle feeding profits. Feeder cattle prices will likely move higher over the longer term as feeder cattle supplies dwindle, reflecting heifer retention for breeding and successively smaller calf crops.

Corn prices are not likely to decline much until corn supplies increase significantly, which is not anticipated before harvest begins in fall 2013. How long the apparent $5 per pound ceiling on Choice beef will hold is uncertain, but perhaps beginning with October’s Choice beef price of $5.03, the ceiling will likely be solidly exceeded sometime during the last quarter of 2012 or first half of 2013, which should provide some relief for packers. At $4.77, the all-fresh beef price set a new nominal record in October, reflecting the continuing popularity of ground beef, and will likely help Choice beef break the $5 mark, ERS explained.