In early March, USDA confirmed a highly pathogenic form of bird flu in a breeding flock of 73,500 Tennessee broiler chickens. Alerted after hundreds of birds died suddenly, the agency identified the cause as a strain of the flu virus that came from wild birds, unrelated to the virus that caused the 2015 U.S. outbreak, but deadly and contagious nonetheless. Officials destroyed the entire flock to keep the virus from spreading, as well as worked with workers to ensure they didn't carry the disease to other farms.
Although the avian fluenza response plan worked as designed, this latest outbreak may have marketers wondering: Are we at risk of facing turkey, chicken or egg shortages should another widespread outbreak occur similar to the last one, in 2015? USDA called that 2015 outbreak the largest animal health emergency in U.S. history, costing farmers nearly 50 million birds and a conservatively estimated total economic impact of more than $3.3 billion before ending in June of that year. Retail turkey prices weren't noticeably affected, but egg prices soared in response.
Where do poultry markets stand going into this upcoming flu-risk season?
Chicken. Broiler meat production in January was 2 percent above last year at this time, at 3.5 billion pounds, owing mostly to an increase in the number of birds slaughtered, USDA reports. December production was 3.3 billion pounds, 4 percent above December 2015 on a per day basis. Preliminary data suggested that February production was also higher than a year earlier on a per-day basis; however, bird weights may have been lower, masking a larger number of birds in the supply than implied by the slaughter data. Growers appear to be continuing a trend toward sending birds to processing at lighter weights, in order to alleviate some reported quality problems. These recent developments, as well as the recent resumption of growth in average weights, contributed to increased expectations for first-quarter production. The forecast was raised 50 million pounds above the previous first-quarter forecast.
Meanwhile, stocks of broiler meat in cold storage as of Dec. 31 were 783 million pounds, 6 percent below a year earlier, but 3 percent above November, largely due to a higher breast meat total. Year-ending stocks for 2017 were increased 30 million pounds.
The March 5 announcement confirming avian flu led some countries to restrict imports of poultry from this country, although most of these countries had limited their restrictions to poultry and products from Tennessee or from within a more limited area in the vicinity of the finding. Although those restrictions would in theory save some supply for domestic use, only a small proportion of U.S. broiler meat would be affected by these restrictions, USDA says.
Eggs. In late February, USDA revised egg production estimates upward for the last two years, bringing the size of the U.S. table-egg layer flock as of Jan. 1 higher by about 4 million birds from the previous estimate, to 314 million birds, a record level for that date. This led 2017 production forecasts for both table and hatching eggs to be increased substantially from the February forecasts, totaling 2.82 billion eggs more in aggregate for the year.
In fact, December data for the average number of table-egg layers in the national flock was the highest since the series began in 1984. This contributed to higher-than-expected production for the fourth quarter, at 22.8 billion. In addition, the nation's flock appears to getting more productive, now laying 80.6 eggs per 100 hens, an all-time record.
As with chicken meat exports, the appearance of flu in Tennessee will likely lower U.S. egg and egg product exports, but exports in 2017 are now forecast to reach 305 million dozen, a 9-percent increase above 2016.
Turkey. Turkey farmers appear to be making up for losses incurred during the last flu outbreak. USDA reports production grew 5 percent in January 2017 compared with a year earlier, as the industry continued to build on the gains made in 2016. Recent growth is largely due to increased young turkey placements from turkey hatcheries, which have averaged 6 percent higher over the last 6 months compared with the same period a year earlier. The forecast for production in the first half of 2017 was raised 15 million pounds to account for the placement expansion. Total production in 2016 reached 6.0 billion pounds, an increase of 6 percent over 2015 and 4 percent greater than 2014. Year-ending stocks reached 279 million pounds to close out 2016, the highest since 2012. As a result, 2017 ending stocks were increased to 300 million pounds.