Chicken buyers have taken notice that the U.S. broiler industry is placing more hatching eggs and an apparent expansion of chicken production is under way.
Given the apparent expansion in broiler chicken egg sets as of October of 2016, chicken breast prices will likely fall from $1.59 to $1.45 and maintain a low monthly average during the first quarter of 2017. With a normal monthly price range, an absolute low in chicken prices of $1.20 is likely.
Increase in egg sets means lower chicken prices
When buyers see such an expansion in broiler hatching egg sets, they are typically not in any hurry to cover first quarter needs since they see lower prices are likely coming. That’s because history suggests the current expansion in hatching egg sets will mean good news for chicken buyers in early 2017.
Hatching egg sets increase more than 3 percent
The years 2004, 2005, 2010, 2013, 2014 and 2016 saw increases of 3 percent or more in hatching egg sets. In the five earlier years, the lowest monthly price (boneless/skinless breast, full butterfly, tender out parts) in the first quarter of the next calendar year averaged down 7 percent. In all other years, the price change was a 2 percent increase during the same period.
History suggests that the 3.2 percent expansion of hatching egg placements reported by USDA in October of 2016 will mean good news for chicken buyers in early 2017.
The years 2004, 2005, 2010, 2013, 2014 and 2016 saw increases of 3 percent or more in hatching egg sets. Prices averaged down 7 percent in the five earlier years.
Monitor the latest broiler egg sets and chicken placement data: www.WATTAgNet.com/market-data
