The chicken markets are nearing a beginning-of-the-end level where they are starting to break even after months and months of horrendous losses due to an ill-conceived expansion last year that got production, costs, prices and returns all out of order.
To be certain, chicken and chicken breast meat prices this week were still under year ago, but the complex was heading in the desired direction as production was moderating and costs -- especially corn costs -- were coming down, letting margins that have held substantially below the line all of this year rise to where chicken companies can finally see the light at the end of the loading dock.
Chicken production this year at the week ended Oct. 15 totaled 6.5 billion birds, 1.9% fewer than year ago, under year ago for the second straight week after being over year ago all year.
Chicken meat production totaled 27.773 billion pounds, 0.8% more than year ago, the smallest year-over-year comparison of the year.
Chickens increased 1 to 6 cents to 65-68 cents and 65-71 cents/lb. in the eastern and midwestern regions yesterday, 14.2% lower than year ago. Other whole bird measurements were up -- the Georgia dock by 2.9% and the U.S. Department of Agriculture's weighted average by 4.6%.
Breasts were unchanged at 66-67 cents/lb., 8.3% lower than year ago, and breast meat was down 3-5 cents to $1.05-1.17/lb., just 3.9% lower.
Business is slow, and it will be getting worse as buyers turn more and more of their attention toward beef roasts, hams and turkeys for the holidays, according to Feedstuffs sources. However, where supplies had been dragging on the markets, they are down enough now to begin supporting the markets, sources said.
A major processor seems to have finally made the adjustment in production that it's been working to achieve, one source said.
Leg quarters were unchanged at 42-52 cents/lb., 30.6% greater than year ago, on good export business, and full wings increased 5 cents to $1.25-1.35/lb., 2.0% over year ago, on good seasonal demand for football-game parties and tailgating.
Leg quarters and wings also are becoming staples for family meals due to inexpensive prices, sources said. "Americans have discovered wings," one source suggested, noting that chicken dark meat is normally shunned and shuttled to foreign markets.