AUBURN, Ala. — Broiler processors are positioned for profitability heading into 2015, with strong U.S. chicken consumption and falling feed prices. Meanwhile, recent research from Auburn University indicates broiler feeders might take a closer look at feed rations when experiencing disease symptoms of necrotic enteritis.

U.S. broiler production rose 1.6 percent over 2013 levels in the first five months of this year. Integrators were slower to expand than expected, but higher broiler weights kept total quantity in line with strong consumer demand. Forecasters at USDA expect few or small gains in total production for the next half of the year, keeping wholesale chicken prices strong into 2015.

Two major poultry integrators, Tyson Foods and Pilgrim’s Pride, reported earnings last week. "We are nearing the end of what looks to be the best year in our company’s history," said Donnie Smith, Tyson Foods’ president and CEO. Tyson reported a stronger demand for chicken products while anticipating chicken operating margins at or above 10 percent in fiscal 2015 – far above the company’s chicken margin of 1.5 percent in 2011 and 3.8 percent in 2012.

Tyson Foods also announced last week it is selling its Mexican poultry business to Pilgrim’s Pride and its Brazilian poultry business to JBS, the parent company of Pilgrim’s Pride.

Last Thursday, Pilgrim’s Pride reported profits for the past quarter similar to a year ago. Pilgrim’s Pride operating income, however, increased 26 percent over the previous year, partly due to retail price strength in chicken.

Strong chicken prices come from consumer willingness to pay more for meat, and consumers are more likely to add chicken to their weekly menu than even two years ago, according to the National Chicken Council (NCC).

An NCC-commissioned study released in July showed those surveyed were eating chicken in 6.1 meals or snacks per week, on average.

That is almost one more meal or snack per week than indicated in a similar 2012 survey. "With the tight supplies in the cattle and hog herds, and accompanying record beef and pork prices, it’s not surprising to see a double digit increase in chicken consumption this year," said National Chicken Council Vice President of Communications Tom Super.

According to the Council, "Millennials" – consumers 18 to 34 years old – are most likely to consume chicken, a good sign for the long-term.

No matter how low grain and chicken feed prices, disease control and bird health are vital to sustain broiler profitability. Recent research by poultry scientists at Auburn University indicates levels of Distillers Dried Grains (DDGS) in feed rations may influence the bird’s susceptibility to necrotic enteritis, a common broiler malady.

Auburn poultry scientists Ken Macklin and Bill Dozier fed broilers a 15 percent DDGS ration. "That is a higher level than the five- to ten-percent DDGS rations commonly fed to broilers," said Ken Macklin.

They found broilers fed the 15 percent ration had a higher likelihood of enteritis. That surprised Macklin. "I was expecting different results, as I had reviewed research in pigs that showed more DDGS showed a clearing out (positive impact) of the immune system," he said.

Macklin said the results do not disqualify DDGS from broiler rations.

"What it could mean is, if producers have a complex-wide issue with enteritis, then it might be time to look at the levels of DDGS," he said.

The study, which was funded by the U.S. Poultry and Egg Foundation, built on past work by the Auburn researchers who were prompted by observations from Alabama’s broiler industry.

"Some veterinarians were noticing that broilers on rations with DDGS appeared to have more enteric problems, and we wanted to see if experimentally we can reproduce what was being observed," said Macklin.