MISSISSIPPI STATE -- Broiler prices weakened slightly while egg prices dropped sharply during the first part of 2005, giving consumers slightly more reason to be optimistic about prices than producers.

Mike Pepper, president of the Mississippi Poultry Association, described 2004 as a favorable year for broiler production.

"Prices were good last year -- close to the record levels set in 1986. This year prices are down slightly, but production is up," Pepper said. "Feed costs are not as high as they have been some years, but energy costs are.

"Even though prices are down slightly, they are still favorable for producers since last year was such a strong year," Pepper said. "Prices are pretty good for leg quarters, which presentlyhave a strong export market."

Tim Chamblee, poultry specialist with the Mississippi Agricultural and Forestry Experiment Station, said wholesale egg prices were almost 44 percent lower during the first quarter of 2005 than the same period last year. Wholesale prices went as low as 56.17 cents per dozen in April, the lowest since May 2002 and less than half the record set in 2004. Retail prices averaged almost 99 cents per dozen in the first quarter of 2005.

"Retail prices will follow wholesale as prices stabilize. Predictions are for the 2005 retail prices to average around $1 per dozen, about 23 percent lower than last year," Chamblee said. "Overproduction caused the lower prices."

Chamblee said profit margins for egg producers increased substantially from August 2003 through the spring of 2004, prompting growers to increase the national layer flock by close to 12 million birds by last February. Cal-Maine Foods, with houses in Edwards, is Mississippi's only commercial egg producer and the world's largest egg producer.

"Larger companies generally can ride out downturns in the market better than the smaller companies can," Chamblee said.

Many countries have lifted restrictions on U.S. eggs and egg products that were imposed after outbreaks of avian influenza in early 2004. This should help increase exports by about 20 percent more than last year. First-quarter broiler exports increased 17 percent over the same period in 2004. Domestic consumption also is expected to post a 3-percent increase.

"Broiler production has been up about 3 percent, partially from an increased number of birds and an increase in the weight of birds going to slaughter," Chamblee said. "First-quarter prices for broilers were 73.2 cents per pound in 2004 and 71.9 cents per pound this year."