WATT PoultryUSA - January 2012 - 10
The booming global trade in chicken Global trade in poultry is increasing with new challenges and opportunities for U.S. producers By Richard L. Lobb A t seaports around the world, the cargo is swung out of refrigerated ships and packed into dockside cold storage: whole chickens from Brazil, breast fillets from Europe, leg quarters and feet from the United States. The raw, frozen chicken is bound for supermarkets, restaurants, and markets from the gleaming high-rises of Hong Kong to dusty, open-air stalls in Angola and thousands of cities and towns in between. The global chicken trade is booming The trade is expected to continue to grow as more countries open their markets to agricultural goods, trimming the protectionist tariffs and regulations that have shielded lessefficient local producers. Constraints include the rising cost of the grain needed to feed the animals, continuing threats to animal health, and lingering protectionism. But the humble chicken is a globalization success story. The Competitors: Brazil and the US In the international poultry trade, two counties stand out: Brazil and the United States. Together they account for two-thirds of the global trade in broiler meat, forecast by the U.S. Department of Agriculture to total 9.6 million metric tons in 2012. Brazil is expected to ship out 3.5 million tons in 2012, and the U.S., 3 million. The U.S. has been a poultry export power since the 1950's. Brazil began to export chicken in the 1970's and gained markets in the Middle East by paying attention to Islamic halal requirements. The export machine turned into a juggernaut fueled by the country's lower production and processing costs as compared to the United States. But Brazil's buoyant economy and opportunities for lucrative investment in new oil fields have attracted outside investment and sent the currency - the real - soaring against the dollar. "Brazil's cost of feed, labor, energy, and production have gone up, and they are almost the same as in the United States," says Peter Pawlenko, director of global poultry, vegetables & seafood products at AJC International, Inc., a leading trading company based in Atlanta. "In 2002, Brazil could sell whole birds without giblets (WOGs) for 43 cents per pound. Today, their cost is about 73 cents per pound." The product mix between the two countries could also change. Traditionally, as Dr. Paul Aho, a consulting economist in Storrs, CT, points out: "Brazil sells whole birds and deboned breast meat. The United States sells chicken leg quarters." That follows a cultural pattern in the U.S. in which breast meat is far more popular than dark meat, leaving many millions of legs to be sold at a loss unless they can be exported to countries where dark meat is preferred. U.S. traders can sell the legs abroad for more than they would fetch at home, but still less than the price of foreign local product. But price isn't the only consideration. Sometimes it comes down to the color of the boxes. Ghana, for example, imports chicken from the U.S., Brazil, and the European Union. Ghanaians are partial to American brand names, but they like the bright white packing boxes the Brazilians use better than the dull brown boxes from America. And many Ghanaians think Brazilian chicken looks better than the American variety. Will these consumer preferences swing the balance of power between the two trading giants? "The United States will maintain its position because Brazil is not as competitive as it has been," says Pawlenko. "We will maintain our market share. But the U.S. has got to be willing to improve the quality of the products to be shipped outside the country, and it has to improve the packaging." Emerging Markets Russia was once the leading export market for United States chicken. As local producers gained protection from the government, quotas were established and the volume dropped. That volume is now going to the countries formerly known as the "third world." Emerging markets all over the globe are taking imported poultry. The list of top markets for U.S. broiler SPECIAL ADVERTISING SUPPLEMENT
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