Wholesale broiler prices are expected to be “relatively stable” during the end of 2012 and into 2013, despite higher year-over-year production during fourth quarter this year and higher cold storage stocks for the end of 2012, according to the “Livestock, Dairy, and Poultry Outlook” report this week from USDA’s Economic Research Service (ERS).
Reviewing recent price levels and changes, ERS noted that prices for most broiler products were higher in November than in the previous year. One exception was leg quarters, which averaged 51 cents per pound, down 1 percent from November 2011. Leg quarter prices were generally steady through much of the first 10 months of 2012. Whole bird prices were supported by much lower stock levels, averaging $0.99 per pound in November, up 24 percent from the previous year. Lower stocks for other broiler products also helped to move their prices higher. Prices for boneless-skinless breast meat and breasts with ribs were up 7 and 21 percent, respectively. Although cold storage holdings of wings were up 37 percent at the beginning of November, prices have remained very strong. In November, wing prices averaged $1.88 per pound, 47 percent above the previous year and 44 percent more than boneless-skinless breast meat, ERS reported.
ERS said that that the National Agricultural Statistics Services’s preliminary estimate of the 2012 calf crop is well below the 2011 crop and implies a significant reduction in heifers available for retention as replacements during 2013. While a lower year-over-year cow inventory on January 1, 2013 is likely, the significantly reduced pool of heifers available for replacements has implications for January 1 cow inventories for the next several years. In addition, increased heifer retention for breeding will reduce the supply of feeder heifers available for placement on feed, resulting in fewer cattle on feed and marketed from feedlots. Reduced fed-cattle inventories should be supportive of fed cattle prices over the next few years, the report concluded.
