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U.S. Broiler and Turkey Exports for January-November 2019.

01/12/2020

Export data for the first eleven months of 2019 indicate a fractional increase in exports of broiler parts in comparison to the corresponding period in 2018. The overwhelming impression from progressive monthly comparisons is the consistent erosion in unit price although reversed slightly in the third quarter of 2018. The trend in successively lower or static unit prices is attributed to the fact that leg quarters comprise over 96 percent of exports. This product represents a low-value commodity lacking in 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 may boost U.S. exports to Asia in the intermediate term as all animal protein will rise in price as pork supply is curtailed.

 

Total exports of broiler parts for the period attained 2,958,655 metric tons, 0.5 percent more than the corresponding period in 2018 (2,942,673 metric tons). Total value of exports increased by 1.8 percent to $2,977 million ($2,924 million).

 

During January-November 2019 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 3,177,336 metric tons of chicken parts and other forms (whole and prepared) valued at $3,281 million with a weighted average unit value of $1,033 per metric ton, 1.2 percent lower in unit value compared to the first eleven months of 2018 ($1,046 per metric ton).

 

The NCC breakdown of chicken exports during January-November by proportion and unit price for each broiler category for 2019 compared with 2018 (with the unit price in parentheses) comprised:-

· Chicken parts 96.4%; Unit value $973 per metric ton ($975)

· Prepared chicken 2.2%; Unit value $3,588 per metric ton ($3,562)

· Whole chicken 1.4%; Unit value $1,043 per metric ton ($1,007)

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports in January-November 2019 with corresponding figures for 2018:-

PRODUCT

JAN-NOV. 2018

JAN.-NOV. 2019

DIFFERENCE

Broiler Meat

     

Volume (metric tons)

2,942,673

2,958,655

+15,982 (+0.5%)

Value ($ millions)

2,924

2,977

+53 (+1.8%)

Unit value ($/m. ton)

1,099

1,116

+17 (+1.5%)

Turkey Meat

     

Volume (metric tons)

254,854

269,043

+14,189 (+5.6%)

Value ($ millions)

573

626

+53 (+9.2%)

Unit value ($/m. ton)

2,248

2,326

+78 (+3.5%)

Chicken Paws

     

Volume (metric tons)

162,414

166,245

+3,381 (+2.3%)

Value ($ millions)

252

200

-52 (-20.7%)

Unit value ($/m. ton)

1,551

1,203

-348 (-22.4%)

COMPARISON OF U.S. POULTRY MEAT EXPORT DATA FOR JAN-NOV. 2019 COMPARED TO JAN.-NOV. 2018

EXPORTS OF BROILER PARTS JAN.-NOV. 2018

Total broiler parts exports during the first eleven months of 2019 compared with the corresponding period in 2018 increased by 0.5 percent in volume and 1.8 percent in value. Unit value increased 1.5 percent from $1,099 per metric ton to $1,116 per metric ton.

The U.S. broiler industry sells mostly leg quarters, an undifferentiated commodity, in a relatively static and price-sensitive market against competition from other exporters and the domestic production in importing nations. The gain in value of the U.S. Dollar relative to the currencies of Brazil, Argentina and Thailand adversely impacts competitiveness.

The top five importers of broiler meat represented 44.5 percent of shipments during the first eleven months of 2019. The top ten importers comprised 62.8 percent of the total volume.

Mexico was the largest importer of broiler meat from the U.S. during the eleven-month period with a volume of 622,021 metric tons representing 21.1 percent of volume and 18.4 percent of total value at a unit price of $880 per metric ton. Unit value during November 2019 rose 16.7 percent to $814 per m. ton compared with November 2018. For 2019 through November volume decreased 5.9 percent but value increased by 9.7 percent over the corresponding period in 2018

Cuba continued as the 2nd ranked importer during Jan.-Nov. 2019 with 7.2 percent of volume (214,479 metric tons) but 6.3 percent of value ($186.1 million) attributed to the product mix with a unit price of $868 per metric ton. Cuba increased imports by 17.7 percent over the eleven-month period. Imports in October dropped sharply to 3,695 tons, and the nation was not among the top 20 in November. It is hoped that this trade worth $161 million in 2017 and $154 million during 2018 will not be compromised by injudicious diplomatic activity or politically inspired restraints such as enforcement of the Helms-Burton Act and restrictions on travel. This market is courted by both Brazil and Argentina.

Taiwan was the 3rd ranked broiler meat importer during Jan.-Nov. 2019 receiving 185,613 metric tons representing 6.3 percent of volume and 5.7 percent of value with a unit price of $889 per ton. Taiwan decreased purchases by 1.8 percent for the eleven-month period in 2019 compared to 2018. Taiwan increased November imports by 46.2 percent compared to November 2018.

Angola was displaced by Taiwan for 4th place in Jan.-Nov. partly due to a decline in imports during the first two months of 2019. Imports for eleven months attained 157,052 metric tons comprising 5.3 percent of U.S. broiler shipments. This nation reduced their import volume from the U.S. by 21.3 percent for the period in comparison with the first eleven months of 2018. Angola increased November imports from the U.S. by 46.2 percent compared to the corresponding month in 2018

Vietnam was ranked 5th as an importing nation over the first eleven months of 2019. Volume attained 136,627 metric tons valued at $120.4 million with a unit price of $881 per metric ton. Volume and value during the eleven-month period represented 4.6 percent and 4.0 percent of U.S. exports respectively. Shipments will progressively increase due to reduced availability of pork consequent to to an extensive and probably uncontrollable outbreak of African swine fever. In November Viet Nam was the fourth largest importer with 15,137 tons. This was 97.1 percent higher than in November 2018.

Georgia was ranked 8th among importers over the first eleven months of 2019. Volume (109,111 metric tons) and value ($82.4 million) increased respectively by 123.8 and 120.3 percent over the corresponding period in 2018.

South Africa was the subject of considerable litigation and Congressional pressure to remove trade barriers in 2015 and 2016. The nation ranked 10 th during 2018 with imports of 97,590 metric tons of in-bone product with a total value of $87.1 million (Unit value of $892 per metric ton). South Africa ranked 12th for the first eleven months of 2019 importing 79,814 metric tons valued at $69.4 million, lower by 13.1 percent in volume and 15.8 percent in value compared to Jan.-Nov. 2018. Exports to South Africa rose 80.2 percent in November 2019 to 7,472 metric tons compared to November 2018. Domestic producers in South Africa continue to aggressively oppose imports from the U.S., the E.U. and Brazil by applying both legal and political pressure.

The UAE imported 8,985 metric tons in November, double the imports from the U.S. in November 2018.

There is consistent expansion of the ten, second-tier nations importing broiler meat with average monthly volumes ranging from 3,000 to 8,000 m. tons. This is attributed to the promotional activities of USAPEEC and their regional representatives interacting with traders.

TURKEY EXPORTS

The volume of turkey meat exported during the first eleven months of 2019 increased by 5.6 percent and value rose by 9.2 percent compared to Jan.-Nov. 2018 with unit value increasing by 3.5 percent from $2,248 per metric ton in 2018 to $2,326 per metric ton in 2019.

Mexico, the leading importer received 60.2 percent of turkey meat shipped during Jan.-Nov. 2019 (161,969 m. tons) 1.9 percent more than during the corresponding period in 2018 (158,968 m. tons). Exports to Mexico amounting to $389 million, represented 62.0 percent of the total value of $626 million exported.

South Africa, ranked 3rd for Jan.-Nov. 2019 imported 9,248 m. tons of turkey product valued at $12.1 million with a unit price of $1,308 per metric ton. This suggests a low-value product mix comprising mostly MDM, along with 2nd-ranked Benin (10,219 metric tons at a unit value of $1,272 per ton),

Japan dropped to 6th rank over the eleven-month period in 2019 with 5,273 metric tons valued at $21.9 million but with a high unit value of $4,153 per ton. Japan imported 29.5 percent less product during the eleven-month period in 2019 compared to the previous year. This may have been due to unfavorable tariff rate on U.S. products compared to other nations following withdrawal from the TPP in 2017. The U.S. recently concluded a limited trade agreement with Japan that will place U.S. exporters on parity with EU competitors.

Collectively for 2019 through August, the Caribbean (including the Dominican Republic) and Central America represented 7.1 percent of turkey meat exports and 6.2 percent of value.

For the eleven months of 2019 South America showed a 165.8 percent increase in volume to 15,241 metric tons and a 139.9 percent increase in value to $36.7 million with an average unit price of $2,408 per ton. This was mainly due to exports to Peru with their volume comprising 52.6 percent of the total imported by the region during the first eleven months of 2019. Peru increased volume of turkey imports by 206.3 percent compared to the corresponding period in 2018.

CHICKEN PAWS AND FEET

Exports of chicken paws during the first eleven months of 2019 increased by 2.3 percent in volume compared to 2018 to 166,245 metric tons but with a 20.7 percent decline in total value. There was a 22.4 percent decline in unit value to $1,203 per metric ton. Hong Kong imported 94.3 percent of leg and paw shipments.

Trade in feet was impacted by the unjustified blanket embargo imposed on the U.S. by China, our largest importer of paws at the beginning of May 2015. This action included all imports from the entire U.S. following outbreaks of H5N2 strain avian influenza in turkey grow-out operations, egg-producing complexes, non-commercial farms and wild birds in the Northwest and North Central states. These areas were completely separated from regions with broiler production. Imports of U.S. feet and paws have resumed following a reversal in policy by China.

According to the December 23rd USDA Cold Storage Report, the stock level of Paws and Feet on November 30th 2019 increased by 14.9 percent to 30.1 million lbs. compared to November 30th 2018.

 

PROSPECTS FOR 2019 and 2020

The December 16th 2019 Livestock, Dairy and Poultry Outlook Report, projected broiler exports would be 3.200 million metric tons in 2019 and 3.225 million metric tons in 2020. The 2019 projection represents 16.0 percent of the 19.927 million metric tons (43,389 million lb.) of broiler RTC to be produced by the U.S. industry.

Projected exports of turkey products in 2019 will amount to 290,000 metric tons, (638 million lb.), 4.3 percent above 2018 and representing 10.8 percent of 2019 production projected to be 2.677 million metric tons (58,894 million lb.) For 2020 exports are projected at 309,000 metric tons (678 million lb.) or 11.5 percent of anticipated production of 2.693 million metric tons.

The Administration successfully renegotiated NAFTA into a new trilateral agreement termed the USMCA on September 30th 2018.This agreement must still be ratified by the legislatures of Canada and the U.S. Senate. Action during the second quarter to rescind tariffs on steel and aluminum and an agreement with Mexico regarding migrants led to ratification of the USMCA by the Senate of Mexico. This nation has now accepted labor provisions in the USMCA agreement as amended.

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 $1.214 billion for the first eleven months of 2019.

Over the past 20 months 472 diagnoses of END were recorded in backyard flocks comprising predominantly fighting cocks in southern California together with four cases in commercial egg production units. This outbreak does not appear to be over. Diagnoses of LPAI have been made in organic commercial turkey farms in northern California followed by nine LPAI H5N2 diagnoses among three counties in Minnesota five months ago. These sporadic and rapidly-diagnosed and quarantined flocks should not affect exports of broiler or turkey products from the U.S.

The live-bird market system, backyard flocks, fighting cocks and laying hens with outside access and potential contact with migratory birds represent an ongoing danger to the entire U.S. commercial industry and these segments of poultry production place at risk the eligibility of the broiler and turkey industry to export.


 
Copyright 2019 Simon M. Shane