Published on: 15:05PM Apr 24, 2009
The chart of the week is various chicken market trends for the next 11 weeks. It’s been well documented that chicken producer margins have been historically poor leading to a downturn in chicken production. So just like economists look at prior economic recessions and not any other normal year to gauge the current recession we are in, I have a tendency to model expectations for the current chicken markets comparing them to other years where production has been cut. And the latest year that we experienced a downturn in chicken production during the 2nd quarter was 2006. Production during the 2nd quarter of this year is forecasted to be down roughly 5%. The chicken output decline during the 2nd quarter of 2006 was only down .3%. It’s entirely possible that chicken production during the 2nd quarter this year will be its smallest since 2003. In 2006, the chicken breast market increase during the next 11 weeks was nearly triple the average for the past 4 years. The leg quarter market increase doubled. Can we experience similar chicken market increases during the next 11 weeks? Time will tell, but recent market activity suggests it’s unlikely.
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