The U.S. chicken industry is collectively working hard to produce at appropriate levels and avoid an oversupply of chicken, said Bill Lovette, chief executive officer of Pilgrim's. Through strong discipline to follow the basic fundamentals of supply and demand, Lovette said the industry is making sure it remains profitable.
"We won't likely go back to levels of overproduction that has historically plagued the chicken industry," Lovette said during a Pilgrim's quarterly earnings call on August 1.
Citing data from the U.S. Department of Agriculture, Lovette said there has been a slight increase in eggs set when compared to 2012, but chick placements have remained mostly level. With about a week's worth of poultry production in cold storage, and no meaningful expansion of the poultry industry expected until 2014, Lovette said poultry supply levels should be where they need to be.
Demand for chicken products will also prevent an oversupply of chicken. Demand for chicken exports in 2013 is forecast higher, at 7.5 billion pounds, and the demand for chicken exports looks favorable for 2014, said Lovette, who is also chairman of the National Chicken Council. Demand for chicken domestically continues to be strong, he added. Consumers are seeing a better value in chicken than they are in beef and pork, which has led to solid retail and foodservice sales.
