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Market Intel
September 27, 2022


JUST AHEAD OF THANKSGIVING, RECORD TURKEY AND EGG PRICES INDICATE STRAIN ON
POULTRY SECTOR


THE EFFECTS OF HIGHLY PATHOGENIC AVIAN INFLUENZA (HPAI), INFLATION AND MORE IN
TURKEY AND OTHER POULTRY MARKETS


JUST AHEAD OF THANKSGIVING, RECORD TURKEY AND EGG PRICES INDICATE STRAIN ON
POULTRY SECTOR


THE EFFECTS OF HIGHLY PATHOGENIC AVIAN INFLUENZA (HPAI), INFLATION AND MORE IN
TURKEY AND OTHER POULTRY MARKETS

Market Intel / September 27, 2022

Credit: National Turkey Federation 
  Credit: National Turkey Federation   

SHARE THIS ARTICLE


Turkey
Poultry
Market Intel
HPAI

Fall has arrived and Thanksgiving is just around the corner. As many begin
planning for the holiday meal, one of the questions being asked is, “Will there
be enough turkeys to go around for Thanksgiving?” There are many factors fueling
this question. High prices, highly pathogenic avian influenza (HPAI) and
inflation have garnered attention from consumers and media nationwide. This
Market Intel will address the current issues influencing the turkey industry and
what consumers can expect as we edge closer to Thanksgiving and beyond.

HPAI

The first U.S. case of HPAI in a commercial or backyard flock since the
2014/2015 outbreak occurred on Feb. 8, 2022, in a commercial turkey meat bird
operation in Indiana. Since then, there have been 468 detections of HPAI in
2022. As wild birds made their pilgrimage north in the spring, they spread HPAI
to 33 states. Among commercial production, most of the HPAI cases occurred
before mid-summer. Until recently, the most recent cases of HPAI in broiler
production, ducks, table egg layers and turkey were April 22, June 2, June 7 and
July 26. However, the fall migration of wild birds south has reignited the
spread of HPAI. Thankfully thus far, the fall spread of HPAI has been
significantly less than what occurred in the spring. The first fall detection in
a commercial flock occurred on Aug. 26. Since that date there have been 23 cases
of HPAI with active control areas across commercial broiler production, ducks,
table egg layers and turkey operations. For context, between Feb. 8 and July 26
there were 159 cases. Similar to the spring wave, this fall, commercial turkey
operations have been the most significantly impacted, with 21 of the 23 cases.
The remaining two cases have been in commercial table egg laying facilities.
While troubling, the number of facilities and birds impacted this fall is still
well below the spring outbreak numbers.

Expand Image Expand Image

SUPPLY

HPAI has had a significant impact on turkey production in 2022. According to
USDA’s September 2022 Livestock, Dairy, and Poultry Outlook, August 2022 turkey
production came in at 450.6 million pounds, 16% below July, and 9.4% below the
same time in 2021. Turkeys raised in the United States are forecast at 212
million in 2022, down 2% from 2021. Recently, processing weights have been below
historic levels.

Expand Image

The risk of HPAI outbreaks has incentivized growers to market younger birds,
resulting in lower market weights. The average weight of a mature turkey for the
first two weeks of September was just under 29 pounds, 4.5% below August, and 7%
below the average weight in September 2021. July marked the only month where
average processing weights have increased since the HPAI outbreak began.

Expand Image

The typical amount of time it takes for a hen turkey to reach market weight is
14 weeks in contrast to 18 weeks for a tom turkey. This means turkey poults
(young birds) need to be placed on feed in July to be ready for Thanksgiving.
Placements have been increasing since April with July placements estimated at 22
million birds, slightly lower than the same time in 2021. The combination of
lower placements and processing weights may add strain to supplies, which would
likely push prices higher.

Turkey in cold storage has remained somewhat steady during August. USDA’s
September Cold Storage report estimated total pounds of turkey in freezers was
431.67 million pounds on August 31, growing by 1% in the month of August and 1%
above this time last year. Total whole turkeys in freezers were estimated to be
254.79 million pounds, growing by 2% in August but down 3% from this time in
2021.

DEMAND

Inflation has contributed to the rise in turkey and egg prices. USDA released
changes to the Food Price Outlook, 2022 and 2023 on Sept. 23. The Consumer Price
Index for all food (not seasonally adjusted) increased 0.8% between July and
August 2022 and all food prices were 11.4% higher than August 2021.  The index
for grocery store food purchases increased 1.4% during July and was 13.1% higher
than July 2021.

Despite record high prices for turkey, demand has remained strong and is even
forecast to increase. The September USDA World Agricultural Supply and Demand
Estimates (WASDE) report estimated demand for turkey in 2023 down slightly from
August at 5.25 million pounds or 15.7 pounds per capita. If realized, this would
mean 2023 demand for turkey is 7.7% greater than the 2022 demand value of 4.87
million pounds or 14.9 pounds per capita.

PRICES – Turkeys and Eggs

Turkey prices are currently at record levels, resulting from the combination of
tighter supplies caused by HPAI, higher demand, inflation, and increased demands
on U.S. food systems.  The national average price for a frozen, Grade A, whole
young hen, 8-16 pounds, posted a record price of $1.72 per pound on Sept. 3,
2022. That’s 20% higher than the same time last year when the price was $1.44
per pound. Fresh boneless, skinless tom turkey breasts reached a record high of
$6.70 per pound on Sept. 17, 112% higher than the same time in 2021 when prices
were $3.16 per pound. The previous record high price was $5.88 per pound on Nov.
21, 2015, during the 2015 HPAI outbreak.

Egg production has also been affected by inflation and HPAI. Table egg prices
have come back down after posting record highs of $3.34 on July 30, 2022. The
combined regional average price for a dozen grade A large eggs delivered to
warehouse was $2.34 on Sept. 17, 2022, 27% higher than the same time in 2021 and
44% above the five-year average of $1.29.

 USDA’s Chickens and Eggs report estimates that egg production for August was
9.1 billion eggs, 2% below the same time in 2021. Total egg layers in the United
States were 372 million, down 3% from 2021. Accounting for 82% of the total egg
layers, there are 305 million table or market egg layers. Sixty-three million
layers, or 17% of the total, produce broiler-type hatching eggs while 3.55
million layers are responsible for egg-type hatching eggs, accounting for less
than 1% of total egg layers.  Egg-type chicks hatched were 56 million, up 13% in
the month of August, with 49.2 million eggs in incubators on Sept. 1.

August pullet placements reflect a decline in the inventory of egg-layers that
was caused by the spring HPAI outbreaks. Egg-type eggs hatched in April 2022
were 50.8 million, down 15% from 2021. This resulted in a smaller number of
egg-type pullets available for placement. August placement of egg-type pullet
chicks for future hatchery supplies was 249,000, down 25% from the same time in
2021. August placement of broiler-type chicks was down 12% from last year, with
7.58 million broiler-type pullets placed for future hatchery supplies.

CONCLUSIONS

HPAI has had a significant impact on the supply of turkey available in the
United States in 2022. Turkey production is below this time last year and is
forecast to be lower yet in 2023. Fewer turkeys raised combined with strong
demand, inflation and growing demands on food systems have led to record high
prices for turkey and other poultry products such as table eggs. The good news
is fall HPAI detections are well below spring numbers. While there should be
enough turkeys to go around for Thanksgiving, pressure will keep prices high
with supplies forecasted lower and demand forecasted higher for 2023.

Contact:
Bernt Nelson
Economist
(202) 406 - 3623
berntn@fb.org
 
Veronica Nigh
Senior Economist
(202) 406-3622
veronican@fb.org
 



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Market Intel
September 27, 2022


OVERVIEW OF DAIRY PROGRAMS IN THE FARM BILL


OVERVIEW OF DAIRY PROGRAMS IN THE FARM BILL

Market Intel / September 27, 2022

Credit: 1778011/ CC0 
   Credit: 1778011/ CC0   

Milk production remains an integral piece of agricultural production in the
United States. With wild market disruptions and supply chain shortfalls
underpinning milk price volatility most of the past five years, understanding
the farm bill provisions intended to prevent further dairy farm closures is
vital.

Full Article

Market Intel
September 13, 2022


SEPTEMBER WASDE DROPS CORN, SOYBEAN PRODUCTION, INCREASES COTTON PRODUCTION;
WHEAT UNCHANGED


SEPTEMBER WASDE DROPS CORN, SOYBEAN PRODUCTION, INCREASES COTTON PRODUCTION;
WHEAT UNCHANGED

Market Intel / September 13, 2022

Credit: Arkansas Farm Bureau, used with permission.  
   Credit: Arkansas Farm Bureau, used with permission.   

In its September WASDE, USDA applied its objective yield plot results to crop
production estimates, resulting in decreased yield estimates for corn, soybeans
and cotton for the 2022/23 marketing year, while leaving wheat unchanged.

Full Article

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