America has a growing chicken glut

America’s poultry producers may have put too many eggs in one basket.

For the past year, producers have been ramping up supply as they bet high beef prices would push Americans toward cheaper chicken. But Americans kept buying beef, leaving suppliers with billions of birds and not enough mouths to eat them.

Too many chickens in the kitchen

Chicken supplies increased ~4.5% year-over-year in the second quarter, as producers raised larger flocks and favorable weather helped more birds survive to maturity.

• Through the first half of the year, US companies slaughtered 4.9+ billion chickens, up 3% from last year.
• Additionally, a new generation of chickens that grows faster while consuming less feed has also resulted in more meat per bird on average.

The oversupply is pushing prices down. Wholesale prices for boneless, skinless chicken breasts have fallen by ~37% over the past year, squeezing producers’ margins. Pilgrim’s Pride, the country’s second-largest poultry processor, saw its Q2 profit plunge by 96% year-over-year to $13.4 million.

Zoom out: What’s bad news for Big Chicken could be good news for your grocery bill. Retail chicken-breast prices fell 0.7% in July and are down 2.7% year-over-year, while some grocers are running additional poultry promotions aimed at getting more shoppers into their stores.