LITTLE ROCK — Poultry production data released this week from the U.S. Department of Agriculture show cutbacks made by the commercial chicken industry are helping boost average prices in the grocery store.
The number of birds slaughtered during October, the most recent data available, represents a 3.2 percent decrease at 700 million birds compared with a year ago, USDA data showed. That figure doesn’t include the reduction in the number of chicks produced at hatcheries.
The industry has gotten serious about lowering the available supply since many have lost “too much money for too long of a time,” said Bill Roenigk, an economist with the National Chicken Council in Washington, D.C.
In October 2010, the broiler industry was feeling optimistic about 2011 and there were plans to step up production since the price of corn, one of the main ingredients in chicken feed, had moderated, he said.
“But I’ve not found anybody in the industry that hasn’t said that 2011 has been one of the worst financial years in recent memory,”said Roenigk.
An estimated 42 businesses make up the commercial chicken industry that produced an estimated 3.1 billion pounds of meat in October.
Year-to-date, the industry produced 31.4 billion pounds, a figure that is 2.6 percent higher than the same year ago figure, the USDA reported Wednesday in its monthly livestock, poultry and dairy report.
The export market to Russia remained down, but demand from other destinations such as Hong Kong and the Western African nation of Angola, was up.
The USDA reported 689.7 million pounds of chicken meat were shipped abroad in October.
Strong exports have helped push the price of leg quarter and other leg meats upward, the USDA said.
Prices for almost all broiler products were higher in November when compared with a year ago, the USDA reported.
Roenigk said the price increase is somewhat unusual because November and December, historically, have been the softest months for sales, but there’s been such a significant adjustment in supply that prices have reacted.
The government predicts relatively weak prices for most breast meat next year, along with relatively high corn prices.
The industry remains nervous about corn prices, Roenigk said.
The December futures contract for corn expired Wednesday at $5.80 per bushel, said Dan Vaught, a commodities expert and owner of Vaught Futures Insights in Altus.
That same futures contract peaked in August at $7.79 per bushel, which shows that there’s been a dramatic lowering in price, he said.
“I don’t see corn prices back to trading normally, between the $2 to $3 per bushel range that we’ve seen in the past,” Vaught said Friday.
“At least not without something significantly changing.”
Business, Pages 31 on 12/17/2011