the evolution of broiler production programs since 1985 and ...agri stats and the broiler industry...

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

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






% 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






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






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






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






the evolution of broiler production programs since 1985 and ...agri stats and the broiler industry...

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