US broiler industry turns to efficiency as margins tighten – CoBank
Feed costs ease while production expenses remain above pre-pandemic levels, and oversupply weighs on pricing.
USA – A recent CoBank market assessment shows the US broiler sector is relying more on operational efficiency as financial margins tighten despite relatively favourable feed conditions and steady demand for chicken.
Feed input costs have fallen about 20% compared with a year earlier by the end of 2025, yet overall broiler production costs remained 10% to 15% higher than levels seen before the COVID-19 inflation period.
In response, producers have continued to refine output performance, reflected in a 2% year-on-year decline in the hatchery supply flock in February alongside a 2% rise in eggs hatched from a more productive breeding base in January.
Broiler slaughter volumes also increased, running about 4% higher than the same period a year earlier across the first 10 weeks of 2026 as processing activity expanded.
However, challenges linked to flock health, hatchability, and mortality continue to restrict stronger production gains and are expected to limit output growth momentum through 2026.
Processor profitability was strong during the first half of 2025, supported by lower feed expenses and firm meat pricing, before conditions shifted in the fourth quarter amid oversupply pressures, winter disruptions, and heavier bird weights.
Breast meat prices have remained weak at about US$1.50 per lb, which is roughly 15% below the previous annual average, leaving the market with limited pricing recovery in recent months.
The softer pricing environment, however, is expected to trigger increased retail and foodservice promotions on chicken products through spring and summer as sellers try to stimulate demand.
Demand Holds Firm
Despite pricing pressure in parts of the supply chain, US retail meat sales remained resilient, with dollar sales rising 6.8% and unit volumes increasing 2% over the 52 weeks ending January 2026.
Consumer spending patterns also shifted further toward eating out, with monthly food-away-from-home expenditure averaging US$349 per person in 2025, compared with US$263 for food consumed at home, reflecting higher input and labour costs in the restaurant sector.
Labour expenses remain a major driver of menu price increases, pushing quick-service restaurants to feature more chicken-based items as they seek lower-cost protein options to protect margins.
Overall livestock and poultry inventory, measured in grain-consuming animal units, has stabilised at about 100 million units over the past four years, with declines in cattle partially offset by growth in hog and poultry production.
CoBank expects only gradual changes in US livestock numbers ahead, as cattle herd rebuilding remains slow and protein markets adjust to steady but competitive supply conditions across the sector.
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