Michael O`Shaughnessy Russ Whitman Terence Wells

Michael O`Shaughnessy Russ Whitman Terence Wells

Michael O’Shaughnessy
Russ Whitman
Terence Wells
Caesars Palace, Las Vegas
April 28, 2015
“Up, Up and Away” “Broken Axel”
- May, 2014
- June, 2014
“Whole Lotta Nothin’”
- August, 2014
“Cinderella Story”
“Cold Shoulder”
- February, 2015
- July, 2014
“From Russia No Love”
-April, 2015
-March, 2015
“Headwinds”
“Pinch Me”
CHICKEN
YEAR IN REVIEW
“Split Decision”
- January, 2015
- September, 2014
“Glut”
- October, 2014
“One for the Books” “Absentee Ballot”
- December, 2014
- November, 2014
Eggs Set,
Total of 19 Selected States
2013
2014
2015
215
Eggs in Millions
210
205
200
195
190
185
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: USDA
Updated: 04/22/2015
Chicks Placed,
Total of 19 Selected States
2013
2014
2015
Head in Millions
175
170
165
160
155
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: USDA
Updated: 04/22/2015
Head in Millions
Pullet Chicks Hatched
For Domestic Supply Flock
2013
2014
2015
8.0
7.8
7.6
7.4
7.2
7.0
6.8
6.6
6.4
6.2
6.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: USDA
Updated: 04/21/2015
Head Count
Avg. Live Weight
160
6.10
155
6.00
150
5.90
145
5.80
140
5.70
135
5.60
2011
Source: USDA
2012
2013
2014
2015
Updated: 04/23/2015
Weight in Pounds
(weekly avg.)
Head in Millions
Young Chickens Slaughtered
YTD Comparisons - April 23
Source: USDA
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
Jan-14
Nov-13
Sep-13
Jul-13
May-13
Mar-13
Jan-13
Pounds in Millions
Weekly Production:
Ready-To-Cook Weight
750
700
650
600
550
500
Updated: 04/23/2015
Pounds in Millions
Chicken in Cold Storage
through March 31st
200
180
160
140
120
100
80
60
40
20
0
2014
2015
+ 77%
+ 35%
Total Holdings
+ 27 %
- 23%
+ 43%
Breasts &
Leg Quarters
Breast Meat
Source: USDA
Wings
Legs
Updated: 04/22/2015
2014
Metric Tons in Thousands
Broiler Meat Exports
YTD through February
2015
140
120
100
Total World Exports
- 14.7 %
80
60
40
20
0
Source: FAS/GATS
Updated: 04/15/2015
UB Chicken Index
2013
2014
2015
$0.95
$0.90
$ / lb.
$0.85
$0.80
$0.75
$0.70
$0.65
$0.60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Jumbo Boneless Breast Meat
2013
2014
2015
$2.25
$ / lb.
$2.05
$1.85
$1.65
$1.45
$1.25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Line Run Breast Tenders;
Clipped
2013
2014
2015
$2.50
$ / lb.
$2.25
$2.00
$1.75
$1.50
$1.25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Wings vs. Jumbo Wings
Wings
Jumbo Wings
$2.00
$1.75
$ / lb.
$1.50
$1.25
$1.00
$0.75
Source: Urner Barry
Updated: 04/22/2015
Leg Quarters,
Frozen for Export
$0.55
Small
Medium
Jumbo
$0.50
$ / lb.
$0.45
$0.40
$0.35
$0.30
$0.25
Sep-14 Oct-14 Nov-14 Dec-14
Source: Urner Barry
Jan-15 Feb-15 Mar-15
Updated: 04/22/2015
$0.95
Foreign Exchange Rates;
Mexico, Peso
16.0
$0.90
15.0
$0.85
$0.80
$0.75
Canadian Dollars per US Dollar
$0.70
Pesos per Dollar
Euros per Dollar
Foreign Exchange Rates;
European Union, Euro
14.0
13.0
12.0
Foreign Exchange Rates;
Canada, Dollar
NYMEX Light Crude Oil
Continuous Front-Month Futures
1.30
$120
1.25
1.20
$100
1.15
$80
1.10
$60
1.05
$40
1.00
Source: US Energy Information Association
IN SUMMARY…
• Complex in production expansionary phase
• Expanding Breeder Flock
• Eggs Set and Chicks Placed
• Is it really a concern?
• Chicken is SEXY! QSR and Retail Activity; Per Capita Consumption
on the rise (USDA F2015: Chicken +4.9 lbs or 5.87%, Beef -.1 lb)
•Additional business resulting from high price of beef
• Tale of two halves – white meats vs. dark meats
• Wings more predictable in 2014-2015
• Growth anticipated to be moderate. No. of head slaughtered and
average bird weights trending higher (USDA April Forecast @ 3.8%)
“The Breast of Times”
-May, 2014
“The Plot Thickens”
-April, 2015
“Watching the Flock”
“Multi-tiered”
-June, 2014
“Four!”
-July, 2014
“Autopilot”
Let’s Talk-August,
2014
“What’s it going to take?”
“Chest Out”
Turkey
-February, 2015
-September, 2014
-March, 2015
“Weak at the Knees”
-January, 2015
“Slow Leak”
-October, 2014
“Throttling Down”
“No Tree Grows to the Sky”
-December, 2014
-November, 2014
Turkey Eggs Set
YTD Weekly Avg. - April 22
Eggs in Millions
(weekly avg.)
7.0
6.5
6.0
5.5
5.0
2011
2012
Source: Urner Barry
2013
2014
2015
Updated: 04/22/2015
Poults Placed
YTD Weekly Avg. - April 22
5.5
Head in Millions
(weekly avg.)
Poults Destroyed
“No girls allowed”
‘13 vs ‘12 YTD + 32%
‘14 vs ‘13 YTD -1%
‘15 vs ‘14 YTD + 177%
5.4
5.3
5.2
5.1
5.0
2011
2012
Source: Urner Barry
2013
2014
2015
Updated: 04/22/2015
Poults Destroyed:
Gender Breakdown YTD
Hens Destroyed
450,000
YTD Toms:
73,769
400,000
350,000
Head
300,000
250,000
200,000
150,000
100,000
50,000
0
Jan
Source: Urner Barry
Feb
Mar
Apr
Updated: 04/22/2015
Turkey Slaughter;
RTC Equivalent - YTD April 23th
1.75
Billions of Pounds
1.70
1.65
+ 4.6%
1.60
1.55
1.50
1.45
1.40
2013
Source: USDA
2014
2015
Updated: 04/23/2015
2014
2015
Turkey in Cold Storage
through March 31st
Pounds in Millions
120
+ 16%
100
Total Holdings
+3.3 %
+ 6%
80
- 12%
60
40
20
+ 28%
+ 3%
Legs
Mech.
Debnd. Mt.
0
Toms
Source: USDA
Hens
Breasts
Updated: 04/22/2015
Whole Turkeys in Cold Storage
through March 31st
190
Pounds in Millions
180
170
160
150
140
130
120
110
2010
Source: USDA
2011
2012
2013
2014
2015
Updated: 04/22/2015
$ / lb.
UB Turkey Index
2013
2014
2015
$1.70
$1.60
$1.50
$1.40
$1.30
$1.20
$1.10
$1.00
$0.90
$0.80
$0.70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Frozen 16 Pound Toms
2013
2014
2015
$1.25
$ / lb.
$1.20
$1.15
$1.10
$1.05
$1.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Yearly Market Low
16-22 Lb. Toms
$1.05
$1.00
$ / lb.
$0.95
$0.90
$0.85
$0.80
$0.75
$0.70
2010
Source: Urner Barry
2011
2012
2013
2014
2015
Updated: 04/22/2015
Fresh Tom Breast Meat
2013
2014
2015
$4.25
$3.75
$ / lb.
$3.25
$2.75
$2.25
$1.75
$1.25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Urner Barry
Updated: 04/22/2015
Competing Lines
$1.80
Fz. Tom Drums
Fz. Thigh Meat
23/27 Select Hams
$1.60
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
$ / lb.
$1.40
Source: Urner Barry
Updated: 04/22/2015
Fz. Tom Drums
Fz. Thigh Meat
23/27 Select Hams
Competing Lines
$2.00
$1.75
$1.25
$1.00
$0.75
$0.50
Source: Urner Barry
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
$0.25
Apr-14
$ / lb.
$1.50
Updated: 04/22/2015
IN SUMMARY…
•Industry still exhibiting UNEXPECTED production constraint
• YTD RTC Slaughter +4.6%, Head +3.4%
• USDA 2015 Forecast +4.67% (2014 RTC -0.8%, Head -2.67%)
• International influence on raw materials mixed. White charging
ahead, Dark retreating. Parts-China ban, Oil, Currencies
• U.S. demand solid and consistent-Per cap disappearance +3.2%
• Whole birds exhibit solid fundamentals-Is another 2014 on tap?
• Breast meat…dare we say it?
• Freezer stocks: Manageable
• HPAI curve ball
@UBPOULTRY