Prices for the three main competing animal proteins in the United States have been on the upswing at an increased trajectory for the last two years. As seen in Figure 1, beef has led the way in price increases, followed by pork, and to a lesser degree, poultry. While poultry remains the least expensive animal protein, its price has been at an unprecedented high since fall of last year, and recently took an exponential jump. When combined with price inflation of all domestic products, poultry’s price increase is most likely being driven by increased demand for the lower cost protein in response to the steeper upswings in beef prices, and to a lesser extent, pork.

Figure 1. Retail Meat Prices

Poultry

On the poultry front, overall production has been slightly higher than historical average through the first two quarters of 2022 but has recently dropped. In contrast, eggs set and chick placement has remained above average for the same time, possibly indicating some livability challenges in the field. Totally antibiotic free (ABF) production has decreased from a high of 62% of all production to 50% or less in the past year, as growers and integrators are finding increasing mortality difficulties. The increasing prices and demand for chicken has further pushed the housing demand, while housing costs remain high. To offset some of the costs, many companies are offering significant incentives for new housing. Growers need to be aware of potential tax implications that some of the incentives could cause and make proper preparations with a qualified accountant to avoid being blindsided by a high tax bill.

Mortality management is always a concern for poultry growers and the recent cost increases in the mortality freezer service has many growers worried. For some further information in this area, read Commercial Poultry Mortality Management Economics.

Highly Pathogenic Avian Influenza has slowed down, but the recent outbreak in southern Georgia indicates that the threat may not be over for the southeast, and close biosecurity is still warranted. To date, 186 commercial flocks have been affected overall – mostly commercial table egg farms – causing the depopulation of over 40 million birds.

Propane prices are somewhat stable now (figure 2) and are likely not to decrease significantly before the typical winter increases begin. This could indicate that it may be the prime opportunity to lock in future heating fuel costs by pre-purchasing or securing contracting agreements for this coming winter’s heating fuel needs.

Finally, the USDA is considering proposed changes to the Grain Inspection, Packers and Stockyard Administration rules concerning contract poultry. Growers are encouraged to go to the federal register website and carefully read the proposed changes and offer public comment as desired.

Figure 2. Propane Prices

Beef

Extreme drought out west and high input prices overall have pushed stocker prices down as western producers foresee grazing difficulties this summer and fall (figure 3), while premium beef prices have shifted demand to ground beef, causing an uptick in cull cow prices (figure 4) – a major source of ground beef. As a result, the overall cow herd in the U.S. has declined (figure 5) with many cows going to slaughter because of the drought and fertilizer prices, as well as a high percentage of heifers are being slaughtered. Since Alabama is primarily a cow-calf state, this could present an opportunity for producers who can maintain their cow herds on decent pasture to capitalize on predicted higher calf prices in the future. It also may present a chance to lower the overall herd age by taking advantage of cull cow prices now by selling aged cows and reinvesting in heifers with better genetics. Stocker producers in Alabama may also be able to take advantage of the declining purchase prices on stockers, if Alabama does not see any drought issues going into the fall, however, fertilizer and fuel prices will remain an obstacle.

Figure 3. Weekly Calf Price by Year

Figure 4. Weekly Slaughter Cow Prices by Year

Figure 5. Beef Cow Changes from 2021 to 2022 by State