Increases in egg production are expected to drive prices downward for 2005, while prices for turkeys are expected to hold about steady to slightly higher, according to forecasts at the USDA's Agricultural Outlook Forum 2005 at Arlington, Va.

“After egg prices reached record levels during late 2003 and early 2004, growers increased production,” said Shayle D. Shagam, livestock analyst for the USDA's World Agricultural Outlook Board.

“In the face of larger supplies, wholesale prices averaged in the mid-60 cent range in the second half of 2004 and prices are likely to soften further in 2005.”

Table egg production is forecast to be 6.5 billion dozen, almost 2 percent above 2004, and hatching egg production will likely increase about 2 percent.

For 2005, wholesale egg prices are forecast to decline to 64 cents to 68 cents per dozen.

After two years of declines, turkey production in 2005 is forecast to increase 2 percent to 3 percent, to 5.58 billion pounds, Shagam said.

“Despite increasing returns last year, turkey production declined 3.7 percent as egg set lagged year-earlier levels. The number of turkeys slaughtered in 2004 dropped more than 5 percent, only slightly offset by a small increase in average live weights.”

Recent egg sets have remained below a year earlier, “indicating producers are remaining cautious in egg expansion plans.”

As supplies have tightened, turkey prices, which had declined to 1998 levels in 2003, rebounded sharply in 2004. Prices for eastern hens averaged 69.7 cents per pound, their highest level since 2000.

“Since only moderate production gains are forecast in 2005, prices are expected to be in the 69 cents to 73 cents range,” Shagam said.

The export outlook for turkeys “is positive,” with an increase of 15 percent expected, to 510 million pounds. Exports in 2004 were off about 8 percent due to concerns about Avian influenza.

“With an expected recover in sales to China/Hong Kong and continued growth in sales to Mexico, exports in 2005 are likely to exceed 2001's record level.”

e-mail: hbrandon@primediabusiness.com