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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Broiler Week

08/09/2019

Weekly Broiler Production and Prices

Chick Placements.

The Broiler Hatchery Report released on August 7th confirmed that a total of 232.1 million eggs were set during the week ending August 3rd, up one percent compared to the corresponding week in 2018. A total of 180.0 million day-old chicks were placed among the 19 major broiler-producing states during the week ending August 3 rd. This was two percent more than in the corresponding week in 2018. Total chick placements for the U.S. amounted to 187.3 million. Claimed average hatchability was 82.4 percent for eggs set three weeks earlier. Broiler chick placements for 2019 through July 27th amounted to 5.78 billion, one percent more than YTD 2018.

Broiler Production

According to the August 9th USDA Broiler Market News Report (Vol. 66: No. 32) for the processing week ending August 3rd 2019, 172.4 million broilers were processed during the week at an average live weight of 6.18 lbs. (6.17 lbs. last week) and a nominal yield of 76.0 percent. The number of broilers processed was 2.1 percent more than the corresponding processing week in 2018. Processed (RTC) broiler production for the week was 809.5 million lbs. (367,945 metric tons), 1.8 percent more than the corresponding week in 2018. Production YTD of RTC in 2019 is 23.74 million lbs. (10,790,233 metric tons), 1.9 percent more than in 2018 YTD.

Broiler Prices

The USDA National Composite Weighted Wholesale price on August 2 nd 2019 was up 0.3 cent per lb. from the previous week to 83.2 cents per lb. compared to 89.9 cents per lb. during the corresponding week of 2018; 88.2 cents per lb. for July 2019 and 90 cents per lb. for the three-year average.

The USDA Southern States (SS) benchmark prices in cents per lb. (rounded to nearest cent) as documented in the Broiler Market News Reports August 9th 2019 are tabulated with a comparison with the previous week:-

Product

USDA SS. Previous week Cents/lb.

USDA SS. Past week Cents/lb.

Difference.  %

Whole Index

 

36

 

Tenderloins

173

168

-2.9

B/S Breast

101

101

Unchanged

Whole Breasts

91

87

-3.3

B/S Thighs

124

119

-4.0

Whole Thighs

53

51

-3.8

Drumsticks

35

34

-2.8

Leg Quarters

39

39

Unchanged

Wings (cut)

184

184

Unchanged

.

The USDA posted live-weight data for the past week ending July 27 th 2019 and YTD 2019 were:-

Live Weight Range (lbs.)

<4.25

4.26-6.25

6.26-7.25

>7.76

Proportion past week 2018 (%)

22

26

29

23

Change from 2017 YTD (%)

-4

+1

+4

+7

During the past week broilers for QSR and food service (live, 3.6lb. to 4.3lb.) represented 22 percent (last week 21 percent) of processed volume.

On August 5th 2019 cold storage holdings at selected centers amounted to 78,335 lbs., 0.6 percent higher than an inventory of 77,874 lbs. on July 1st 2019.

According to the most recent July 22nd USDACold Storage Report, issued monthly, stocks as of June 30 th 2019 compared to June 30th 2018 showed differences with respect to the following categories:-

  • Total Chicken category declined by 5.8 percent to 836.2 million lbs. (380,100 metric tons) on June 30th 2019 compared to 888.0 million lbs. (403,629 metric tons) on June 30th 2019 2018

  • Leg Quarters were down by 36.7 percent to 54.1 million lbs. consistent with the data on exports albeit at lower unit revenue as documented in the monthly export report.

  • The Breasts and Breast Meat category was down by 2.1 percent to 177.7 million lbs. attributed to increased domestic demand from food service and retail.

  • Wings showed a 22.7 percent decrease, contributing to a stock of 63.0 million lbs. reflecting seasonal demand and increased consumption presumably during featured sports events.

  • Paws and Feet decreased by 28.9 percent to 26.1 million lbs. as a result of variable but increased demand from Hong Kong but at a progressively lower unit price.

  • It is noted that the Other category comprising 390.3 million lbs. represented a significant 46.7 percent of inventory on June 30th 2019. The high proportion in the Other category suggests further classification or re-allocation by USDA to the designated major categories.

Comments

Placements of chicks and level of slaughter are assumed to be consistent with USDA projections.

The outbreak of of velogenic viscerotropic Newcastle disease in California appears to be over with no cases reported for eight weeks. The USDA is expected to declare an end to the outbreak. There is every possibility of a reemergence of cases in the fall either through introduction from Mexico or from transient carriers in the fighting cock population. There were 448 diagnoses of vvND involving mostly "backyard flocks" (a euphemism for fighting cocks) as of June 28th 2019. Confirmed and documented cases were located in in San Bernardino (141), Los Angeles (45), Riverside (260), Alameda (1) and Ventura (1) Counties. The highest concentrations in San Bernardino and Riverside Counties comprised clusters in close proximity. A diagnosis of vvND was made during the week of March 11 th in a backyard flock (size and type not specified by the CDFA) near Redwood City in Alameda County representing extension of infection to Northern California. This case was apparently restricted to the index farm.

A total of 62 cases were identified in August 2018 compared with 20 in September, 18 in October and 17 in November. A surge in cases occurred in December with 43 confirmed followed by 86 cases in January 2019, 48 in February, 22 in March, 17 during April and 20 in May. In mid-November 2018 the State Veterinarian for California announced a pre-emptive depopulation of all backyard poultry in an affected cluster in each of three counties. This probably led to predictable and unintended consequences. On January 18 th 2019 a diagnosis of vvND was made in Utah County, UT. Preliminary investigation suggested that movement of fighting cocks from southern California was responsible for introduction of infection into the flock of 200 birds. A diagnosis of vvND was made in a flock of "pet birds" (a new euphemism for fighting cocks?) in Coconino County AZ. (near Flagstaff) during early April. USDA believes that this case is connected with Southern California outbreaks since the isolate was homozygous with the endemic strain in fighting cocks in the four-County California region.

No relevant epidemiologic information was provided in the APHIS/CAFD Conference call on December 17th. In late February CAFD imposed a quarantine over the three affected counties restricting movement of poultry. The enforceability of this action is questioned given the nature of the flocks at risk and the intentions of their owners. It is understood that $45 million was assigned for eradication although the objective of control of endemic vvND in game fowl could have been achieved by hyperimmunization rather than playing "whack-a-mole" Editorials in CHICK-NEWS on December 24th and March 1st were posted dealing with the ongoing outbreak. (see EGG-NEWS and CHICK-NEWS under the SEARCH tab entering "Newcastle disease").

Mexico has recognized the OIE principle of regionalization after intensive negotiations between SENASICA and U.S. counterparts in USDA-APHIS assisted by USAPEEC. Exports of broiler parts, fertile eggs and breeding stock should not be impeded unless there is extensive dissemination of vvND with involvement of the commercial poultry industry in central or northern California or adjoining states.

CHICK-NEWS previously commented on the possible impact of failure to reconcile differences to achieve an equitable extension to the NAFTA agreement. Provisional agreement was reached at the end of August in negotiations between the U.S. and Mexico. An eleventh-hour agreement with concessions on all sides was concluded on September 30th and signed on November 30th at the G-20 Meeting. This has created a trilateral successor to NAFTA entitled the USMCA. The tripartite agreement has yet to be ratified by the legislatures of Canada and the U.S. The Senate of Mexico approved the Agreement on Wednesday 19th June.

Broiler exports to Mexico during 2018 attained 651,178 metric tons. This represented 20.3 percent of export volume and 16.4 percent of export value (amounting to $517 million) of the total year-to-date export value of $3.15 billion. In the absence of either the NAFTA or the newly concluded USMCA equivalent, tariffs on chicken could have risen to 75 percent of value creating a non-competitive situation favoring Brazil and Argentina. Fifth-ranked Canada imported 141,257 metric tons of broilers and parts during 2018 valued at $351.7 million. Collectively our NAFTA/USMCA neighbors imported broiler products to the value of $907 million in 2017 and $869 million during 2018. The USMCA will still have to be ratified by the legislatures of Canada and the U.S. hopefully during 2019. Ratification appears to be advancing after the tariff on steel and aluminum from Canada and Mexico was rescinded by the U.S. The threat of a progressive tariff on all imports from Mexico in an attempt to "encourage" participation in limiting northward migration of illegal immigrants announced on May 30 th has been deferred but would have blocked ratification had it been implemented.


 
Copyright 2019 Simon M. Shane