Broiler chick placements for growout since mid-year have a “pattern of strong declines” and this development is expected to continue through the remainder of the third quarter and into the fourth quarter, according to the Livestock, Dairy, and Poultry Outlook report this month from USDA’s Economic Research Service (ERS). For the five-week time-period ending September 10 the average broiler chicks placed weekly was 162 million chicks, 5-percent less than the comparable weeks in 2010.
Fewer chicks placed has resulted in ERS trimming its broiler production estimate for fourth quarter 2011 so the October-December 2011 output is now expected to be 3 percent less than the high quarter of last year. Also, affecting the fourth quarter production estimate is ERS’ expectations that average liveweight for broilers at slaughter will be “much closer to that of the previous years,” the report explained. In July 2011 the average broiler liveweight was 5.76 pounds, a 3-percent gain over year earlier.
Hog producers have in recent weeks experienced narrower spreads between the cost of feed and the selling price of finished hogs. ERS see estimated quarterly feed cost spreads in 2012 remaining positive, albeit at margins less than those in 2011.
Regarding the beef outlook, ERS reported that drought-induced placements of feeder cattle in feedlots in the Southern Plains have essentially filled the feedlots to capacity. The number of cattle placed at lighter weights in Southern Plains feedlots will result in generally longer feeding periods and lower slaughter weights when they go to market. Although dressed weights are increasing seasonally, they are not increasing as fast as in other years because of the large placements of lightweight calves, and atypical patterns in placement weights and fed cattle weights are occurring. These lightweight placements will likely lead to slightly reduced beef production on a per-head basis.
Nonetheless, beef production for the remainder of 2011 and through the second quarter 2012 could be close to year-earlier production. Current stimulated cattle feeding margins imply losses of well over $100 per head, and with current expectations for higher corn prices, steady feeder cattle prices, and steady-to-declining fed cattle prices, negative margins appear likely to continue through the remainder of 2011, possibly into early 2012, ERS explained.
Monthly average retail Choice beef prices declined steadily from their record peak this past May through July, but in August 2011 jumped back to $4.87, equaling May 2011’s high. Despite the high August price, retail beef prices could decline into fall and winter due to the seasonal post-Labor Day decline in demand for grilling proteins, especially in light of the potential for increasing supplies of beef, abundant supplies of pork and poultry, and declining wholesale and retail pork prices, ERS concluded.
