Chicken production and prices reflect better markets in 2012

Thursday, April 5, 2012

by BETTER FARMING STAFF

Canadian chicken farmers get to produce more chicken in the next few months.

That’s a reversal of a trend that saw chicken production cut last year on both sides of the border.  
During the May 20 to July 14 production period (the industry calls it A-111), production will rise to 164,086,546 kilograms eviscerated from 161,600,843 kg for the current A-110 period (March 25 to May 19).

On July 15, when the supply-managed commodity’s A-112 period begins, production will drop to 161,704,747. Compared to a year ago, both the A-111 and A-112 production allocation periods reflect increases  — 1.73 per cent and 4.18 per cent respectively.

Jan Rus, Chicken Farmers of Canada’s manager of market information and systems, notes that production levels for the first two months this year were more conservative than those set for the same time period in 2011. Last year’s drop in production was a reaction to less favourable pricing and inventory factors. “This has turned around again for the better,” he says, explaining that’s why allocations for the coming months have been set a little more aggressively. “Pricing is quite good; historic stocks, actually they are quite low at the moment,” he says.

The price farmers will receive is also rising. Prices for the current A-110 period (March 25 to May 19) are 1.6 cents higher in most provinces compared to the previous period. In Ontario, which is the benchmark other provinces use to set their prices, the domestic producer price rose to $1.59 per kilogram of live weight, compared to $1.58 per kg in the A-109 period and $1.55 for the same period in 2011.

Rus says higher feed prices, particularly corn, were a factor in many of the adjustments. “That’s a major input for chicken,” he says. “To realize decent pricing throughout the chain, the industry decided to adjust their production levels to try and get the pricing they need to remain profitable.”

The industry in the United States “has been doing the same thing,” Rus says. “They’ve made bigger cuts even to get to a point where the industry is making some money again.” BF