Chicken prices likely to fall in 2014Chicken prices likely to fall in 2014

In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.

Broiler production continues to grow despite sharply higher feed costs. Average daily broiler output had risen 1.8 percent from a year ago in April, and production gains are projected to continue in May. That’s mostly because higher chicken breast prices, which are running roughly $.50 per pound above a year ago, are more than offsetting cost increases.

With forecasts for sharply lower feed prices with the new harvest this coming fall, producers have every incentive to rebuild breeding flocks and further increase output later this year — and that should lead to lower chicken prices in 2014.

High breast prices, along with leg quarter prices in excess of $.50 per pound, should mean record large profits for poultry producers in the second half of 2013. Sanderson Farms reported a 2.1-percent earnings increase for its fiscal quarter that closed on April 30, and Pilgrim's Pride said its first-quarter profit jumped 39 percent.

Contact John T. Barone at [email protected].