For the first time in many decades, chicken production fell below the previous year’s levels. Turkey production was also down. Feed prices are at historically high levels, and reduced demand for meat and egg products have hampered all segments of the poultry industry. Chicken production is expected to grow at around 2% in the next decade. This is much lower than the 4.5% average growth rate from 1990 to 2005.
Chicken markets provided a glimpse at value issues facing all meat products during a recession, as typically lower-valued wing prices eclipsed those of boneless skinless breasts in 2009. With its lower-priced protein, chicken is in the best position relative to beef and pork to survive tight consumer budgets. However, breast prices must increase for the industry to succeed in the long run. Prices will increase upon economic recovery but not as much as prices for beef and pork.
During the past decade, about 30% of all chicken exports were destined for Russia. Russia is currently banning chicken treated with chlorine, the production process used in virtually all U.S. plants. If the ban is not resolved quickly, a surplus of dark meat chicken will pull down other chicken part prices, as well as prices for beef and pork.
Source: FAPRI
