UPDATE 1-World's top chicken producers pressured by U.S. supply outlook
(Adds details on chicken supply, Mexico imports)
By Tom Polansek
CHICAGO, March 24 (Reuters) - Shares of the world's biggest poultry producers fell on Tuesday as expectations for an increasing U.S. chicken supply to pressure profit margins overshadowed a decision by top importer Mexico to ease trade restrictions.
Poultry companies have been enjoying large profits recently thanks to high meat prices and declining feed costs. However, a larger-than-expected rise in chicken supplies could push down prices and squeeze margins, analysts said.
Pilgrim's Pride Corp's stock price sank more than 8 percent to its lowest level in a month after the U.S. Department of Agriculture on Monday said leading chicken breeders in February increased the number of young chicks placed for future supply flocks by 9 percent from a year earlier.
Shares of Tyson Foods Inc and Sanderson Farms Inc each slid about 3 percent.
"Producers are cautioning people about extrapolating one month's worth of data, but it's a pretty large jump on a year-over-year basis," said Tim Tiberio, analyst for Miller Tabak + Co.
The number of chicks, or pullets, placed to build future flocks rose 8 percent on the year in January and 5 percent on the year in December.
Investors focused on the increasing supply rather than Mexico's decision to reduce restrictions on poultry imports from U.S. states that have confirmed infections of avian flu. The development was seen as a positive for chicken companies like JBS SA unit Pilgrim's Pride, which has said that exports represent about 8 percent of its business. Continuación...