New insights from the US Department of Agriculture show an optimistic forecast of improving US chicken supplies. This signals that lower supermarket prices for chicken breasts and nuggets could be ahead amid a food inflation storm.
The USDA said in a report on Thursday that domestic broiler production is expected to reach 47.1 billion pounds this year, a 1.6% rise from 2023 figures. As of a July report, the agency expected an increase of only .8% before hiking the supply outlook for two consecutive months.
Bloomberg pointed out that the new USDA report "suggests chicken producers are finally making some strides," adding, "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."
Mark Jordan, a poultry analyst with LEAP Market Analytics, told the media outlet that several hurdles that hindered poultry growth in the US "have been toggled back toward growth that was depressed for a long time."
Bloomberg also noted that speculation on increasing supplies has weighed on several producer stocks because of thinner margins. It added that Pilgrim's Pride, the largest chicken producer in the US and Puerto Rico and the second-largest chicken producer in Mexico, has seen shares slide for the last six sessions—the longest losing streak in a year. Shares of Tyson Foods have also declined for four straight sessions.
What's bad for companies is great for consumers. Growing supplies could certainly continue weighing on chicken boneless breast retail prices.
Sliding chicken prices will likely push cash-strapped consumers to substitute beef for chicken (sorry, Bill Gates, no one is switching real meat for your lab-grown meat). The latest news in the beef space is that US and Brazilian herd sizes are getting tighter. And retail beef prices in the US continue soaring.
The US beef cattle herd size has collapsed to the smallest level in 73 years.
The theme is a 'thrifty' consumer that will substitute beef for chicken. Buy local and support mom-and-pop farmers (or start your own micro-farm). Stop supporting the food industrial complex of processed junk foods.
