The Broiler Chicken Margin Monitor estimates producer margins across the United States, providing users with a comprehensive view of industry profitability and the likelihood of future changes in broiler chicken price and supply. The application, which updates automatically each day, enables chicken buyers, such as restaurants, supermarkets, and food distribution companies, to make better-informed decisions about pricing and product offerings for the medium and long term. Detailed historical data and prices allow users to readily identify and visualize trends in broiler margins going back 10 years.
Customers Use This Application To
Why This Matters
The Broiler Chicken Margin Monitor enables Gro users to stay informed of producer margins across the United States. Understanding broiler producer margins is critical for chicken buyers to anticipate future supplies and prices. Margins prompt producers to either expand or contract production and thus are the single largest determinant of future supplies. In turn, production quantity is the single largest determinant of chicken prices.
With this information, chicken buyers, including restaurants, supermarkets, and food distributors, can make more-informed short-term decisions, such as negotiating contracts with producers. Buyers also are able to make better medium- and long-term decisions, such as planning product offerings with insight into the future availability of supplies and prices.
Margins effectively are calculated by subtracting costs from revenues. For broiler chicken producers, one of the biggest costs is feed, which is made up mostly of corn and soybean meal. To calculate producer costs, Gro’s Broiler Chicken Margin Monitor relies on corn and soybean meal front month futures contract prices as inputs. Micronutrients and processing and overhead prices also figure into the cost equation.
The Broiler Chicken Margin Monitor calculates revenue using USDA AMS data for the chicken cutout, or the weighted average price of major carcass cuts.