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
At 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 less-efficient 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 econo-
mist 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.
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 im-
ported poultry. The list of top markets for U.S. broiler
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