• Boneless breast meat prices stabilized at year–end and are moving higher seasonally.
Prices are –52% from inflated levels in the year–ago period but remain 20% above the five–year average. Leg prices have stabilized, yet remain 6% below year–ago levels, while wing prices remain depressed (–59% YOY) but trending higher. Composite chicken values strengthened but remain under pressure as inventories remain elevated (+9.7% YOY) versus historically low levels in the year–ago period. Elevated retail prices through December (+12% YOY) also weighed on consumer interest, as has low feature activity. Foodservice support for breast meat and tenders has stabilized, which should lend some support to the market in coming months. We expect improved retail and foodservice support at current depressed prices, with stronger planned promotion in 2H 2023. Leg quarter values are likely to remain steady, with a weaker USD and steady exports to Mexico expected to remain supportive.
RTC chicken production has averaged +2.2% ahead of year–ago levels, driven by gains in both slaughter levels and weights. Chicken placements are averaging slightly ahead of year–ago levels (+0.6% YOY), while a shift toward heavier bird weights at some integrators will place more pounds on the market near term. Rabobank anticipates RTC production to remain above year–ago levels in 2023 (+1.8% YOY).
December chicken exports of 301,499 metric tons were down in both volume (–4.3% YOY), and value 4% YOY. Exports to Mexico rebounded (+9% YOY) as lower US chicken prices attracted stronger buyer interest, while exports to China fell 15.9% YOY as HPAI–related trade disruption impacted shipments. In 2022, exports were record large in volume (+4.6% YOY) and value (+17% YOY). While exports to Mexico were down 7.3% for the year, it remained the largest export market by volume (17% of total). The 2022 chicken exports to China of USD 1.1bn were the largest by value (21% of total) and increased 26% YOY. We expect ongoing volatility in exports in 2023, with Mexican exports expected to remain strong, but trade with China to remain under pressure.
Mexican chicken markets have strengthened in February, as supply growth slowed through year–end and demand remains steady. Live prices are currently in line with record prices in the year–ago period and have increased 34% since early January. Despite the price recovery, producers continue to face high feed costs and production growth is likely to slow in coming months to maintain profitability. Wholesale prices remain elevated, with breast meat prices +22% YOY and thigh meat +30% versus year–ago levels. Only whole birds are stable, as production has likely shifted toward lower cost products to maintain margins. In 2022, chicken imports were down 2.8% YOY in volume, despite an 8.4% YOY increase in imports from Chile and a 23% YOY increase from Brazil.
