Low turkey stocks could finally push turkey prices upward.
In a WATT Poultry Chat interview, Dr. Thomas Elam, president of FarmEcon LLC, reviewed leading indicators reflecting the turkey industry's performance at the beginning of 2021. This trends, he said, signal turkey prices - particularly breast meat - could start to recover soon.
Austin Alonzo: I wanted to see if you could share some 2021 leading indicators for us on the markets we examine on this program.
Thomas Elam: Yeah, I want to talk about some numbers we've just recently gotten in on turkey production.
In particular, what I want to do is go through the eggs and incubators and hatch, and some production statistics and talk very briefly about the world agricultural supply and demand projection that was just issued back on the ninth of March.
The first slide is turkey, eggs and incubators and we get those on the first of the month. So we've got January and February in already. January came in at very, very low levels. These are eggs that are sitting in incubators being incubated to hatch, and the poults that will be placed. February was a bit higher, but still much lower than any February in recent history. And I've got three years of history on all of these charts, 2018 to '20. And then what we have for 2021. So we are off to a very slow start on this most basic leading indicator of the population of eggs that are in incubators to be hatched.
So then we go to the next slide, which is actual eggs hatched. And again, January was very low, we don't get the February number for another week or two. But it was below 21 million, the lowest level in the last three years. And consistent with the number of eggs and incubators at the first of January.
And then we look at placements, how many of those poults that were hatched were actually placed. And that came in right at 19 million for January. Again, we don't have February, it will be a little bit higher. But you can see the pattern of the last three years here we are way below where we were for the last three years. And we will be again in February. And these are poults that will grow for 3,4 or 4 and a half months and then be harvested in mid to late spring of this year. Maybe, you might, some of the very heavy birds might go into early summer. So, we're going to have low production based on bird numbers. But weights are also important. So I looked up average live weights for turkeys, and January was about identical to 2020.
We could make up for some of this low bird number phenomenon with heavier weights, but its somewhat unlikely. Weights tend to trend downward through November. And there's no reason to expect that they will they will trend any higher for sure, especially given the fact that corn and soybean meal prices are way up.
So, looking at the world ag supply and demand estimates, USDA is forecasting 2021 turkey production at 5.69 billion pounds versus 5.74 billion for last year. Given these early indicators, it's going to be hard to even make the reduction that USDA is forecasting in 5.69 billion. And on per capita consumption in 2019, just a little over a year ago, we averaged 16 pounds per capita the current projection is 15.5, down three tenths of a pound from last year and I think it could be even a tick lower than that.
With lower stocks that we've seen were pretty much scraping the bottom of the barrel for year end stocks now. This is starting to set the stage for some price recovery finally, especially in breast meat that has been stubbornly low priced for well over eighteen months.
This transcript is edited for length and clarity.