The Evolution of Broiler Production Programs since 1985 and Challenges in How Broilers Will Be Grown in Coming Years
Michael Donohue Vice President, Agri Stats, Inc. Southern Conference on Avian Diseases Milton Dendy Keynote Lecture January 30, 2017 Atlanta, Georgia
Milton Youngsett Dendy (1915 to 2017)
• Born in Marshall County, Alabama in 1915
• Served in the U.S. Army in World War II in North Africa and Europe
• B.S. in Agriculture (1947) from the University of Missouri
• M.S. in Agriculture (1950) also from Missouri
• University of Georgia Cooperative Extension Service from 1957 to 1977
• After retiring from the University of Georgia Mr. Dendy began a lengthy consultancy with the World Bank aiding poultry programs in Africa, the Middle East, Central Europe and China
• ‘kindest, most humble and gentlest of souls’
Donohue Family Motto
• ‘Saepe Iniuriam, Nunquam Incerta”
Donohue Family Motto
• ‘Saepe Iniuriam, Nunquam Incerta”
• English Translation:
– ‘Often Wrong, Never Uncertain’
Agri Stats and the Broiler Industry
• Agri Stats – A Benchmarking Tool
– Best Management Practice Programs
• Confidential and Verifiable Identification of Competitive Strengths and Opportunities
• Action Plans to Improve Costs and Efficiencies
Agri Stats and the Broiler Industry
• Started by Jim Cox – 1985
• Currently > 95% of U.S. Broiler Processors
• Turkey report since 2001 – 95 % Industry Participation
• Egg report : > 100 Million commercial layers
• Swine report : over 1.2 million sows
• Express Markets Inc. (EMI) – Daily U.S. price discovery for U.S. broiler production
– Reporting actual daily invoiced activity of over 180 million lbs. of chicken.
• Reports for Canada, Mexico, Brazil, Chile, Peru, Russia production
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
Agri Stats ‘Vital Signs’
1988 through 2016
Live Wt. (Kgs.)
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1999
2001
2003
2005
2007
2009
2011
2013
2015
Kgs.
Large Debone Tray Pack Fast Food
% Whole Bird Plant Condemn
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
0.20
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
% WB Cond
Agri Stats Inc. – Annual Reports
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
% Hen Day Production (adj. to 45 wks. of age) July to December 2016 and 2017
62.5
63.0
63.5
64.0
64.5
65.0
65.5
66.0
66.5
27 29 31 33 35 37 39 41 43 45 47 49 51
2016 2017 2019
% Hatchability : Adj. to 45 Weeks of Age July to December 2016 and 2017
82.0
82.5
83.0
83.5
84.0
84.5
85.0
27 29 31 33 35 37 39 41 43 45 47 49 51
2016 2017 2018
Changes in Live Wt. Big Bird Deboners
7.07.27.47.67.88.08.28.48.68.89.09.29.4
20 36 52 16 32 48 12 28 44 7 23 39 3 19 35 51 15 31 47 11 27 43 7 23 39 2 18 34 50
Liv
e W
eig
ht
(Lb
s.)
2009 2010 2011 2012 2013 2014 2015 2016 2017
Actual Corn Cost/Bushel September 2006 to December 2016
$2.00$2.50$3.00
$3.50$4.00$4.50$5.00
$5.50$6.00$6.50$7.00
$7.50$8.00$8.50
S F J D M O M A J10 J N A S F J D M O M A J15 J N A S
Actual Soybean Meal Cost/Ton September 2006 through December 2016
$150
$200
$250
$300
$350
$400
$450
$500
$550
J F S A N J J10 A M O M D J F S A N J
Live Cost and Broiler Feed Ing. Cost September 16, 2006 through December 2016
10
15
20
25
30
35
40
25.0
30.0
35.0
40.0
45.0
50.0
55.0
37 51 13 27 41 3 17 31 45 7 21 35 49 11 25 39 1 15 29 43 4 18 32 46 8 22 36 50 12 26 40 2 16 30 44 6 20
Fe
ed
Ing
. C
os
t :
Ce
nts
/Lb
.
Liv
e C
os
t: C
en
ts/L
b.
Week
Live Production Cost Feed Ing. Cost
% WOG Yield U.S. Industry : 2016 and 2017
79.0
79.5
80.0
80.5
10/2
811
/4
11/1
1
11/1
8
11/2
512
/212
/9
12/1
6
2016 2017
Wing Prices (Cents/Lb.) Monthly Avg. Price January 2004 through November 2017
60
80
100
120
140
160
180
200
J04 A M O M D J F S A N J J11 A M O M D J F S A N J
Cen
ts/L
b.
Wing Px. Linear (Wing Px.)
Inventory of Frozen Wings (Lbs. 000) July through December 2016 and 2017
12000
13000
14000
15000
16000
17000
18000
19000
20000
21000
8-Jul 22-Jul 5-Aug 19-Aug
2-Sep 16-Sep
30-Sep
14-Oct 28-Oct 11-Nov
25-Nov
9-Dec
2016 2017
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
Volumes of Processed Lbs. by Plant Type Agri Stats 2000 through 2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Fast Food WBPT Tray Pack Sm Deb Large Deb
.2
Percent of Kgs. by Live Wt. Category
1.6 to 2.0 Kgs.
2.4 to 2.7 Kgs.
2.7 to 3.1 Kgs.
3.1 to 3.4 Kgs. >3.4 Kgs.
2000 25.6 % 30.4 % 23.6 % 0 0
2005 21.6 % 29.2 % 15.2 % 12.8 % 14.2 %
2010 20.5 % 20.4 % 21.8 % 5.7 % 25.8 %
2015 16.6 % 7.5 % 19.9 % 11.9 % 37.1 %
½ 17 19.4% 8.2 % 15.6 % 15.8 % 34.9 %
Live Cost per Kg.
50
60
70
80
90
100
110
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Cen
ts/K
g
Large Debone Tray Pack Fast Food
Feed Cost as a Percentage of Total Live Cost
U.S. Broiler Industry : 1992 to 2016
50%
55%
60%
65%
70%
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
% of Total Cost
Plant Cost as a % of Cost in 1997
80%
100%
120%
140%
160%
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
LGDB Tray Pack Fast Food
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
Seasonal % of Birds fed without antibiotics important for human medicine or ionophores
January 2013 through October 2017
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2013 2014 2015 2016 2017
Feed Medication Programs : November 2017
ABF Prog Adj Cal Conv Days to 2.7 Kgs
% Mort Avg. Live Wt Birds (000)
ABF (1) 5,607 45.88 4.55% 2.88 336,755
NAE (2) 5,614 45.84 4.49% 2.70 297,455
Traditional 5,523 45.45 4.27% 3.17 340,402
Cocci Prog Adj Cal Conv Days to 2.7 Kgs
% Mort Avg. Live Wt Birds (000)
Ionophore 5,528 45.46 4.20% 3.23 299,373
Chemical 5,618 45.92 4.20% 2.58 216,774
Vaccine 5,572 45.73 5.03% 3.21 161,607
(1) No Health Maintenance Antibiotic incl. BMD, Virginiamycin, Tylosin
(2) No Health Maintenance Antibiotic or Ionophore Coccidiostat but can use a a Chemical Coccidiostat or vaccine for coccidiosis control
70
75
80
85
90
95
Oct
-10
Feb-1
1
Jun-1
1
Oct
-11
Feb-1
2
Jun-1
2
Oct
-12
Feb-1
3
Jun-1
3
Oct
-13
Feb-1
4
Jun-1
4
Oct
-14
Feb-1
5
Jun-1
5
Oct
-15
Feb-1
6
Jun-1
6
Oct
-16
Feb-1
7
Jun-1
7
Oct
-17
% Broiler Complexes Using Meat Products
%
3.0
3.5
4.0
4.5
5.0
5.5
Oct
-10
Feb-1
1
Jun-1
1
Oct
-11
Feb-1
2
Jun-1
2
Oct
-12
Feb-1
3
Jun-1
3
Oct
-13
Feb-1
4
Jun-1
4
Oct
-14
Feb-1
5
Jun-1
5
Oct
-15
Feb-1
6
Jun-1
6
Oct
-16
Feb-1
7
Jun-1
7
Oct
-17
Broiler Average Inclusion of Meat Products
%
Broiler Performance vs. % Animal Protein March 2017– 2.4 to 3.2 kg. live Wt.
% Animal Protein Zero 0 to 2 2 to 4 > 4
Adj. Feed Ing Cost 21.50 * 20.41 21.01
Adj. Cal Conv 5,728 * 5,570 5,647
Days to 2.7 kgs. 46.40 * 45.69 46.36
% Mort 5.52 * 4.60 4.99
Live Wt. 2.79 * 2.91 2.95
Cal/Lb. Feed 3,134 * 3,154 3,141
% Protein 19.90 * 19.52 20.12
% Lysine 1.22 * 1.19 1.20
% An. Protein 0 * 3.14 5.48
% Added Fat 2.09 * 1.63 1.38
% WOG Yield 78.17 * 79.30 79.22
% Bnls Yield 24.04 * 25.29 24.79
# Complexes 20 1 13 11
10
20
30
40
50
60
70
80
90
100
J-08
D-0
8
M-0
9O
-09
M-1
0A
-10
J-11
J-11
N-1
1A
-12
S-12
F-13
J-13
D-1
3
M-1
4O
-14
M-1
5A
-15
J-16
J-16
N-1
6A
-17
S-17
% Broiler Complexes Using DDGS
%
3.0
4.0
5.0
6.0
7.0
8.0
9.0
J-08
D-0
8
M-0
9
O-0
9
M-1
0A
-10
J-11
J-11
N-1
1A
-12
S-12
F-13
J-13
D-1
3
M-1
4
O-1
4
M-1
5A
-15
J-16
J-16
N-1
6A
-17
S-17
Broiler Average Inclusion of DDGS
%
For Only those using:
Range 1% – 18%
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
Hourly Wage Rate without Benefits U.S. Broiler Industry
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
1/2
17
$/Hour
Human Resources Trends U.S. Broiler Industry
% Weekly Turnover in 1st Processing
0
1
2
3
4
5
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
1/2
17
% Turnover
Slow Growing Broilers • Broiler Feed Conversion
– Live Lbs. Produced 2015 • 49,012,810,953 • Feed Conversion Ratio 1988 2.05 • Feed Conversion Ratio 2015 1.89
– Tons of Feed Required 2015 • 46,317,106
– Tons of Feed Required @ 1988 FCR • 50,238,131
– Additional Corn Acres needed @ 1988 FCR • 578,743
Slow Growing Broilers
• Growth Rate
– 7,854,617 140 Birds grown in 2015
• Density : 12.4 birds per square meter
• Growth Cycle to 2.83 kgs. in 2015: 63 days (incl. downtime)
• Growth Cycle to 2.83 kgs. in 1988: 76 days (incl. downtime)
– Broiler Houses needed in 2015 : 32,727
– Broiler Houses that would have been needed in 1998 : 39,480
• Houses needed : + 6,753
Topics
• Long Term Advances : Breeders and Broilers
• Current production Trends
• The Evolution of Product Mix in broiler production
• Changes in Feeding programs in recent years
• Ongoing challenges in live production and processing
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