Poultry market price, production projections for 2019

The U.S. poultry market will benefit from an economic recovery in 2019 with lower grain prices and increasing consumption of poultry products.

Dr. Paul Aho (Photo by Alyssa Conway)
Dr. Paul Aho (Photo by Alyssa Conway)

After a period of recession in the U.S., the American economy is growing along with the world, which is expected to benefit the poultry industry in 2019, according to projections from Dr. Paul Aho.

The poultry industry economist and consultant with Poultry Perspective spoke as part of the 2019 International Production & Processing Expo (IPPE) in Atlanta on Feb. 13.

Commodity prices on the rise

In 2015, a commodity bubble burst but Aho said it will inflate once again. Commodity prices across all sectors are expected to increase over the next 10 years, including for feed inputs like corn and soybeans. This is partially driven by the fact that China says it wants to put 10 percent ethanol in its gasoline.

“Usually when China says they’re going to do something, they actually do it, so we have to take them seriously,” Aho said.

Other contributing factors include falling reserves or a supply hiccup like a drought. As a result, with corn prices now at their low, Aho says they will rise over the next decade.

The opposite is true for soybeans, whose stocks are rising through 2019.

After implementing tariffs on U.S. soybeans, China’s imports from the U.S. dropped in 2018, instead importing more from Brazil. However, Aho expects this to change and the tariffs to be removed, citing the fact that producers in China are changing the rations in their feed to make up for the lack of U.S. soybeans. He said this has also made soybean meal prices artificially low now in the U.S.

On the positive side, Aho said despite a 17 percent chance of a drought for any given year, soil in soybean- and corn-growing regions of the U.S. is saturated with water, so there should be no worry of a drought in 2019.

Projections for poultry

After falling to 80 pounds per capita during the recession, chicken consumption has now recovered to over 90 pounds per capita. Aho said contributing factors for the decline were lower median income, higher input costs and a decline in foodservice.  

Aho projected that in the short term, the current economic growth, low grain prices and rise in total meat production and consumption will continue.

According to Aho, the consumption of poultry, pork and beef each increased by 1 billion pounds from 2017-19. However, he cautioned that this level of growth is not sustainable in the long term, projecting that consumption of poultry, pork and beef will only rise by 750 million pounds for each meat type.

Aho cited recent United States Department of Agriculture (USDA) data on production of poultry parts and made the following predictions:

Chicks placed

  • No increase in production in 2019 so far compared to the same period in 2018.
  • USDA predicts very small increase in production overall for 2019.

Deboned breast meat

  • Peak prices in 2019 are lower than 2018.
  • Low break even.
  • Barely profitable at the end of 2019.
  • Trade issues in 2019 will continue to affect chicken leg quarter exports.
  • Prices will remain volatile for leg quarters forever and won’t rise much in 2019.

Wings

  • Robust demand.
  • Low unemployment, higher wages mean Americans can afford to pay for wings.
  • Prices in 2019 will be higher than 2018.

Paws

  • Worth hundreds of millions of dollars if China market opens but will remain worthless without China.

Eggs

  • Per capita consumption and prices going up in 2019.
  • Increasing year-end flock.

Turkey

  • Same production in 2019 as 2018.
  • Production increase will help bump prices up from a low in 2018.
Page 1 of 1590
Next Page