MISSISSIPPI STATE -- The state's poultry industry lost value in 2000 but easily held onto their ranking as the state's top agricultural commodity.

Mississippi's poultry industry is expected to have a value of $1.45 billion in 2000. This value is down about 2 percent from 1999 and down from a high in 1998 of $1.54 billion. Production is estimated at 1.58 billion eggs and 706 million broilers weighing 3.5 billion pounds in 2000.

"These figures put us fourth nationally in the number of birds produced, fifth in pounds produced and 16th in egg production," said Tom Smith, Extension poultry specialist with Mississippi State University.

Wallace Morgan, head of MSU's Poultry Science Department, said 2000 was a bad year for profit.

"There was no profit out there. There was an oversupply of broilers, so prices have been real poor, and as a result, production nationally is down," Morgan said. "It was a money-losing year. The cost of energy has been going up, and that impacts the poultry growers in a negative way because that is an actual cost of production."

Morgan said poultry companies in Mississippi actually lost money during the year, and pay to farmers did not increase. Increased costs to farmers reduced their income significantly.

The upside is that grain prices have remained low, and soybeans and corn had good yields nationally this year.

"The crops that we depend on had a good year, and their low prices made it possible for poultry producers to not go totally broke," Morgan said.

Historically, Mississippi has relied on exports to keep the market strong, with much dark meat going to the former Soviet states. With uncertainty in that region, exports have been lower. Despite this, Morgan said prices for dark meat are going up and prices for white meat, which Americans prefer, are dropping. What exports the state had in 2000 were not enough to increase domestic prices.

"The market is going to have to play a bigger role in the poultry industry to keep it viable," Morgan said. "Consumers are probably going to have to pay more for chicken. You just can't produce chicken much cheaper than we're doing now."

Much of the added cost of production comes from increased regulation within the industry aimed at such issues as food safety and environmental protection. Morgan said that while these are good things, they come at a price, and drive up the cost of production.

Morgan said poultry companies have been losing money for a long time, but some market predictors are expecting a turnaround in the industry next year.

"It would be a big help to have a year with good prices, low energy and feed costs, and high demand for poultry," Morgan said.