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.
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