Historic Chicken Production Slowdown

Published on: 09:42AM May 22, 2009

The chart of the week is annual chicken production. As stated in the latest issue of the Weekly Commodity Report, chicken production in 2009 as an annual average is forecasted to decline for the first time in 34 years. Why? It’s well documented that chicken producer margins have suffered during the past 18 months or so which has caused them to cut production. Chicken production for the better part of 2009 has been trending 5% plus below year ago levels. 2009 will almost certainly mark only the fourth chicken output decline since 1961 and by far the steepest. A decrease of around 1.5 billion pounds is anticipated this year which is roughly 6 times more than any other decline since 1961. In short, an historic slowdown in chicken production is occurring. When will chicken output turn around? Probably not anytime soon. Yes chicken breast and leg quarters have risen as of late, but so have feed prices hurting producer profitability. The 2009/10 crop corn and soybean planting remains behind and supplies for both products are anticipated to remain historically tight for the foreseeable future.


These comments and data are provided for information purposes only and are not intended to be used for specific trading strategies. Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that a person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor any opinion expressed constitutes a solicitation to buy or sell futures or options on futures contracts or OTC products. Covered parties (as defined below) shall not be liable for any direct, indirect, incidental, special or consequential damages of any kind, whatsoever (including attorney’s fees and lost profits or savings) in any way due to, resulting from, or arising in connection with this email, including it’s content, regardless of any negligence of the covered party including but not limited to technical inaccuracies and typographical errors. “Covered Parties” is defined as American Restaurant Association Inc., ARA Trading and the employees of both companies. Commodity trading involves risks, and you should fully understand those risks before trading.