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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

U.S. Broiler and Turkey Exports for January-August 2020.

10/10/2020

Export data for the first eight months of the current year confirmed a 4.1 percent increase in exports of broiler parts including feet, in comparison to January-August 2019. Unit price was 1.9 percent lower compared to the corresponding period in 2019 at $1,006. Volume increased by 4.1 percent but value declined by 2.1 percent compared to the first eight months of 2019. There were progressive reductions in value during May (7 percent), June (11 percent), July (14 percent) and August (10.7 percent) compared to corresponding months in 2019.

 

Unit price is constrained by the fact that leg quarters comprise over 96 percent of chicken meat exports including feet, with whole birds and specialty products contributing a small proportion to the volume shipped. Leg quarters represent a relatively low-value commodity lacking pricing power. Exporters of commodities are subjected to competition from domestic production in importing nations. Generic products such as leg quarters are vulnerable to trade disputes and embargos based on real or contrived disease restrictions.

 

The extensive outbreak of African swine fever has boosted U.S. livestock and poultry exports to Asia over the intermediate-term, as all animal protein will rise in price as pork supply is restricted. The effect of increased demand from Viet Nam is apparent but disruption in ports and transport infrastructure due to the COVID-19 outbreak impacted exports to China during January and February 2020.

 

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat (including feet) exports for January-August 2019 with the corresponding months in 2020:-

 

PRODUCT

JAN.- AUG. 2019

JAN.- AUG. 2020

DIFFERENCE

Broiler Meat & Feet

Volume (metric tons)

2,229,327

 2,320,697

+91,370 (+4.1%)

Value ($ millions)

2,286

2,334

+48 (+2.1%)

Unit value ($/m. ton)

1,025

1,006

-19 (-1.9%)

Turkey Meat

Volume (metric tons)

190,475

163,307

-27,168 (-14.3%)

Value ($ millions)

431

370

-61 (-14.2%)

Unit value ($/m. ton)

2,263

2,266

+3 (+0.1%)

Chicken Paws

JAN-MARCH 2019

Volume (metric tons)

39,358

Not disclosed

Value ($ millions)

48

Not disclosed

Unit value ($/m. ton)

1,219

Not disclosed

 

COMPARISON OF U.S. CHICKEN EXPORT DATA FOR JANUARY-AUGUST 2020 COMPARED TO CORRESPONDING MONTHS IN 2019

 

EXPORTS OF CHICKEN PARTS AND FEET, JANUARY-AUGUST 2020

 

Total broiler parts, predominantly leg quarters but including feet, exported during the first eight months of 2020 as compared with 2019 increased by 4.1 percent in volume and 2.1 percent in value. Unit value was 1.9 percent lower at $1,006 per metric ton.

 

The fluctuation in value of the U.S. Dollar relative to the currencies of Brazil, Argentina and Thailand adversely impacted competitiveness through May. Notwithstanding these restraints, volume and value were higher during the first eight months of 2020 compared to 2019. The uncontrolled outbreak of African swine fever in China and Southeast Asia from early 2019 onwards coupled with disruptions in chicken production during January and February 2020 associated with COVID-19 has increased demand for protein with international repercussions on trade in chicken and pork.

 

The top five importers of broiler meat represented 48.8 percent of shipments during January-August 2020. The top ten importers comprised 64.9 percent of the total volume reflecting greater concentration among the top importers.

 

Mexico was the largest importer of broiler meat from the U.S. by volume during January-August 2020 with a volume of 438,621 metric tons representing 18.9 percent of volume and 17.9 percent of total value at a unit price of $840 per metric ton. During August 2020 exports to Mexico declined 11.6 percent in volume and 31.4 percent in value compared to August 2019 with unit value declining to $739 per metric ton.

 

China was ranked 2nd by volume among importers of broiler parts and feet combined, over the period February through August 2020. China represented 12.2 percent of export volume and 17.8 percent of value at a unit price of $1,475 per ton indicating a high proportion of feet shipped. China was the leading importer in August based on value representing 22.5 percent of total product shipped at a unit price of $1,521 per metric ton.

 

The average unit price of broiler products excluding purchases by China during the first half of 2020 was $960 per ton. Given a unit price of $1,551 for feet shipped to Hong Kong during the first quarter of 2020 it is concluded that a high proportion of shipments to China comprised feet. The relative volume of shipments of feet to Hong Kong and China during March and April reflect that about half the consigned feet to Hong Kong prior to March 2020 were trans-shipped to Mainland China.

 

Taiwan was the 3rd ranked importer during January-August 2020 with 7.6 percent of U.S. export volume and 7.0 percent of value attributed to the product mix with a unit price of $922 per metric ton suggesting leg quarters as the principal product.

 

Viet Nam was the 4th ranked broiler meat importer during January-August 2020 receiving 121,333 metric tons representing 5.2 percent of volume and 4.4 percent of value with a unit price of $853 per ton. Viet Nam increased volume of purchases by 29.4 percent over January-August 2020 compared to 2019. Shipments are expected to progressively increase due to reduced availability of pork attributed to an extensive and currently uncontrolled outbreak of African swine fever. In late January and during early February some shipments of chicken were diverted to Viet Nam as a result of port congestion in China arising from the COVID-19 shutdown. During August Viet Nam was 6th in rank among importers up 23.7 percent in volume compared to August 2019 but down 12.3 percent in value.

 

Cuba was 5th in rank over January-August 2020 with 4.9 percent of volume and 4.1 percent of value. Shipments during January-August 2020 were 36.8 percent lower than in January-August 2019. It is hoped that this trade worth $191 million in 2019 and $93 million over the first eight months of 2020 will not be compromised by injudicious diplomatic activity or politically inspired restraints such as enforcement of the Helms-Burton Act and extreme restrictions on travel. This market is courted by both Brazil and Argentina. Cuba has lost financial support from Venezuela in addition to collapse of tourism due to COVID-19, reducing availability of foreign currency. Purchases by Cuba in August amounted to 14,637 metric tons, down 46.5 percent from August 2019.

 

Hong Kong Ranked 9th as an importer of parts and feet combined during the first eight months of 2020. During this period, volume and value attained 2.5 and 3.4 percent respectively of total chicken exports. Volume was down 65.3 percent from the corresponding eight months in 2019 suggesting that previous to restoration of trade with China, Hong Kong served as a receiving point and trans-shipment base for the Mainland. The average unit value of shipments to Hong Kong during January-April 2019 was $1,234 per metric ton. The average price for feet exported to Hong Kong during the first quarter of 2019 was $1,230 per metric ton. In August 2020 the unit prices of shipments to Hong Kong, ranked 20th and China, were $1,330 and $1,521 per metric ton respectively, suggesting commonality of product with feet predominating.

 

There is constant fluctuation among the ten, second-tier nations importing broiler meat with average monthly volumes ranging from 3,000 to 8,000 metric tons. Expanding volume is due to the promotional activities of USAPEEC and their regional representatives interacting with traders.

 

In August 2020 nations gaining in volume compared to the corresponding month in 2019 (with the percentage change indicated) in descending order of volume were:- Taiwan (+25); Viet Nam (+29); Canada (+13); Philippines (+10) and Iraq (+10) with a total net gain of 82,855 metric tons among these nations.

 

August gains were offset by losses in exports to Cuba (-37); Guatemala (-12); Hong Kong (-65); Angola (-50) and Columbia (-20) with a total net loss of 267,375 metric tons.

 

EXPORTS OF TURKEY PRODUCTS

The volume of turkey meat exported during January-August 2020 declined by 14.3 percent and value fell by 14.2 percent compared to January-August 2020 with an average unit value increase of 0.1 percent from $2,263 per metric ton in the first seven months of 2019 to $2,266 per metric ton in January-August 2020.

 

Mexico, the leading importer received 64.4 percent of turkey meat shipped during January-August 2020, 6.1 percent less than during the first eight months of 2019. Exports to Mexico amounting to $244.0 million at a unit price of $2,321 represented 65.9 percent of the total value of $370.3 million shipped.

 

China continued as a distant second-ranked importer with 10,916 metric tons imported in February-August comprising 6.6 percent of volume and 4.8 percent of value for the eight months with a unit value of $1,612, confirming shipment of a low-value product mix. Exports were constrained by COVID-19 disruption during the review period but this market represents potential for U.S. turkey producers.

 

Canada was the third-ranked importer during the first eight months of 2020 with 2.5 percent of volume and 4.7 percent of total value at a high unit price of $3,665 per metric ton.

 

South Africa, ranked 4th during January-August 2020, imported 3,435 metric tons at a unit value of $1,223 per ton. Tariffs were not raised on imported turkey meat in comparison to broiler meat. Volume and value were down 57.6 percent and 61.5 percent respectively compared with January-August 2019 possibly relating to the unfavorable exchange rate of the SARand relative to the U.S. Dollar (SAR 16.5=US$ October 10th). Imports in August attained 431 metric tons at a unit value of $1,392 per metric ton, suggesting MDM.

 

During the first quarter of 2020 the U.S. concluded a limited trade agreement with Japan that will place U.S. exporters on parity with EU competitors. This could restore the ranking of Japan as a significant importer. In 2019 turkey shipments were valued at $21.9 million but with a unit price of $4,153 per metric ton. Negligible shipments were recorded from March through August.

 

Collectively during the first seven months of 2020 the Caribbean Region (including the Dominican Republic and Haiti) and Central America represented 7.8 percent of turkey meat exports and 6.8 percent of value.

 

CHICKEN PAWS AND FEET

For April and May the data distributed by USAPEEC combined feet with broiler meat products preventing evaluation of the respective quantities and prices of feet and leg quarters. Accordingly values for the first quarters of 2019 were 2020 are documented as a basis for comparison.

 

According to the August 24th USDA Cold Storage Report, the stock level of Paws and Feet on July 31st 2020 was down 14.3 percent to 23.6 million lbs. from July 31st 2019. Stock fell 6.8 percent from July 31st 2020 attributed to exports to China. It will take until the end of the third quarter to determine the effect of the Phase-One trade agreement with China coupled with the end of the COVID-19 lockdown on the total export of feet. March and April export data suggest displacement of sales from Hong Kong to China by comparison with previous data for Hong Kong. Prior to April approximately half of shipments destined for Hong Kong were apparently landed and transshipped to the Mainland.

 

PROSPECTS FOR 2020 and 2021

The September 18th 2020 Livestock, Dairy and Poultry Outlook Report, projected broiler exports would attain 3.266 million metric tons in 2020. This value represents 16.1 percent of the 20.25 million metric tons (44,552 million lb.) of broiler RTC to be produced by the U.S. industry. The USDA projects exports in 2021 to attain 3.245 million metric tons (7,139 million lbs.)

 

The USDA projects that exports of turkey products in 2020 will amount to 252,000 metric tons, (554 million lb.), 15.8 percent below 2019 and representing 9.4 percent of 2020 production projected to be 2.59 million metric tons (5,687 million lb.)

 

The Administration successfully renegotiated NAFTA into a new trilateral USMCA on September 30th 2018.This agreement has been ratified by legislatures of the three nations and took effect on July 1st 2020. It is important to recognize that exports of chicken and turkey meat products to our NAFTA partners amounted to $1.288 billion in 2017, $1.279 billion in 2018 and $1.407 billion in 2019. It will be important to respect the terms of the USMCA since punitive action against Mexico over seasonal fruit and vegetables and against Canadian aluminum will result in reciprocal action by our trading partners to the detriment of the poultry industry.

 

Both the END outbreak in backyard flocks in southern California and the localized outbreaks of LPAI in turkey flocks in the Carolinas are now officially over. In accordance with OIE principles no embargos should be imposed on either the states or counties affected.

 

 The live-bird market system supplying metropolitan areas, numerous backyard flocks, fighting cocks and laying hens allowed outside access, potentially in contact with migratory birds represent an ongoing danger to the entire U.S. commercial industry. These segments of poultry production place at risk the export eligibility of the broiler and turkey industries.


 
Copyright © 2020 Simon M. Shane