UNITED STATES-POULTRY STOCKS DOWN.
USDA issued its Cold Storage and March Chicken and Eggs reports Tuesday afternoon, both pointing to continued reductions in chicken supplies, which should bode well for prices and poultry processors.
The Cold Storage report showed total stocks of frozen chicken on March 31 were down 2 percent from the previous month and down 17 percent from last year. Breasts in storage were down 9.9 percent, and leg quarters were 29.2 percent below year-ago stocks.
Larger turkey supplies pushed total poultry supplies up 3 percent from the previous month, but stocks were still down 4 percent from a year ago. Total pounds of turkey in freezers were up 10 percent from last month and up 19 percent from March 31, 2008.
The March Chicken and Eggs report showed total pullet (young breeder hens) inventory fell by 1.8 percent year-on-year. J.P. Morgan analyst Ken Goldman noted that while the decline was narrower than the declines in January and February, the absolute number of pullets remains low. The number of pullets hatched fell by 5.8 percent year-on-year, the steepest decline in four months.
"We are encouraged that long-term industry discipline seems largely intact," Goldman wrote in a note to investors. "The data are modestly positive for Sanderson Farms, Pilgrim’s Pride and Tyson Foods. All else equal, fewer pullets translate into less meat, higher chicken prices and better margins for chicken processors."
