More Supply Constriction Surfaces

Poultry fat prices moved higher into the Delmarva region as well as out of the Mid South market. Tight supplies across the feed fat spectrum are driving prices higher in those markets, but AL/GA prices fell to 20 cents FOB. The move lower out of the AL/GA market could be an indication of limited demand and in turn, a risk signal for lower prices across the broad market in the near term. Broiler slaughter has been on a decline since mid-March, which coincides with the spread of COVID-19. Production in January through the week ending March 14^th, averaged just shy of 171 million head per week.

The next six weeks are forecast out at 159.3 million head per week, down 1 percent compared to the prior six week average of 161 million head and down 3 percent compared to last year. The tighter production adds risk for higher prices in the near term as does tight yellow grease supplies. However, eggs sets are down and flock sizes…