‘Restrictions on US exports pressure chicken prices’

According to USDA, the recent avian influenza outbreak has not affected broiler meat production but is expected to pressure chicken prices due to trade restrictions placed on US exports.

The trade bans are boosting cold storage holdings. At the same time, integrators in the broiler industry continue to expand the number of eggs placed in incubators and chicks going for grow-out, USDA says in its report.

At the end of April, cold storage holdings of almost all broiler products were significantly higher than a year ago, with wings being the one exception. Leg quarters in cold storage totaled 181 million pounds, 80% higher than the previous year and 52 million pounds higher than at the start of the year.

Chicks placed averaged 173 million a week from May 9 to June 6, up 3.7% from the same period in 2014, suggesting continued expansion in broiler production into at least the third quarter, USDA said.

According to USDA, production growth and trade restrictions will mean additional broiler products on the domestic market, pressuring prices. In May, wholesale prices in the Northeast market for bulk leg quarters averaged 34 cents per pound, 32% lower than a year ago.

Larger supplies of broiler products are expected to push prices lower in the third and fourth quarters.