Through November (latest data available), annual U.S. poultry production reached a six-and-a-half-year high, 2.3 percent above the previous year. For the most recent three months, production is 2.7 percent above the same period one year ago; however, the pace appears to be slowing. This suggests to us that the annual growth rate, which had been accelerating over the last year, may slow in its ascent. While growth may slow, we see no sign at this time of declining production.
Meanwhile, poultry consumption as measured by the Personal Consumption Expenditures is at a record high. On an annual basis, personal consumption is 2.4 percent higher than one year ago, but like production, the rate of growth has been slowing.
Higher prices may be a factor here. The annual Producer Price Index for Young Chickens is 3.8 percent above the year-ago level; however, trends in the quarterly data suggest the rate of ascent in prices will abate. Slowing price inflation for chickens will be aided by a deceleration in feed price inflation. This will be supportive of continued high levels of consumption and, in turn, production.
Editor’s Note: This is a quarterly economic update provided by ITR Economics, published exclusively in The National Provisioner.