(Bloomberg) -- The outlook for US chicken supplies is improving, signaling lower retail prices than previously expected through the end of the year, according to the US Department of Agriculture.
Domestic broiler production is expected to reach 47.1 billion pounds this year, a 1.6% increase from 2023, the USDA said in a report on Thursday. As recently as July, the agency was forecasting an increase of just 0.8%, before raising its outlook for two straight months.
Chicken producers including Tyson Foods Inc. and Pilgrim’s Pride Corp. have seen profits surge this year on lower costs for grain fed to birds amid robust demand among consumers seeking cheaper alternatives to beef. Still, chicken supplies have been constrained by issues including poor egg fertility, raising concerns about the sector’s ability to increase output.
Recent data suggest chicken producers are finally making some strides. The number of eggs hatched in the US has risen by more than three percentage points since early July, while the number of chicks placed for production rose to the highest seasonal level in two years.
“There are a couple of switches that have been toggled back toward growth that were depressed for a long time,” Mark Jordan, a poultry analyst with LEAP Market Analytics, said in an interview.
Speculation about a supply rebound has weighed on producer stocks. Pilgrim’s, which is controlled by Brazilian meat powerhouse JBS, has fallen for six straight sessions — the longest losing streak in a year — during which it lost more than 10% of its value. Tyson Foods has dropped for four straight days.
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