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Meat Exports

02/08/2020

U.S. Broiler and Turkey Exports in 2019.

Export data for 2019 indicate a fractional (0.6 percent) increase in exports of broiler parts in comparison to 2018. The overwhelming impression from progressive monthly comparisons is the stasis in unit price of broiler parts although the trend was reversed slightly during the third quarter of 2018. Successively lower or static unit price 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 2019 attained 3,224,679 metric tons, 0.6 percent more than in 2018 (3,206,508 metric tons). Total value of exports increased by 2.4 percent to $3,231 million ($3,152 million 2018).

During 2019 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 3,456,850 metric tons of chicken parts and other forms (whole and prepared) valued at $3,553 million with a weighted average unit value of $1,027 per metric ton, 0.8 percent lower in unit value than in 2018 ($1,035 per metric ton).

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

· Chicken parts 96.4%; Unit value $968 per metric ton ($965)

· Prepared chicken 2.2%; Unit value $3,577 per metric ton ($3,549)

· Whole chicken 1.4%; Unit value $1,027 per metric ton ($1,035)

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

 

PRODUCT

2018

2019

DIFFERENCE

Broiler Meat

     

Volume (metric tons)

3,206,508

3,224,679

+18,171 (+0.6%)

Value ($ millions)

3,152

3,231

+79 (+2.5%)

Unit value ($/m. ton)

983

1,002

+19 (+1.9%)

Turkey Meat

     

Volume (metric tons)

277,036

289,078

+12,842 (+4.6%)

Value ($ millions)

623

677

+54 (+8.7%)

Unit value ($/m. ton)

2,245

2,335

+87 (+3.9%)

Chicken Paws

     

Volume (metric tons)

173,939

176,539

+2,600 (+1.5%)

Value ($ millions)

269

211

-58 (-21.6%)

Unit value ($/m. ton)

1,547

1,195

-352 (-22.7%)

COMPARISON OF U.S. POULTRY MEAT EXPORT DATA FOR 2019

COMPARED TO 2018

EXPORTS OF BROILER PARTS 2018

Total broiler parts, predominantly leg quarters, exported during 2019 compared with 2018 increased by 0.6 percent in volume and 2.5 percent in value. Unit value increased 1.9 percent from $983 per metric ton to $1,002 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 44.2 percent of shipments during 2019. The top ten importers comprised 62.2 percent of the total volume.

Mexico was the largest importer of broiler meat from the U.S. during 2019 with a volume of 683,018 metric tons representing 21.2 percent of volume and 18.7 percent of total value at a unit price of $886 per metric ton. Unit value during December 2019 rose 22.8 percent to $947 per m. ton compared with December 2018. For 2019 volume increased 4.9 percent but value increased by 17.0 percent over 2018

Cuba continued as the 2nd ranked importer during 2019 with 6.8 percent of U.S. export volume (219,682 metric tons) but 5.9 percent of value ($190.5 million) attributed to the product mix with a unit price of $867 per metric ton. Cuba increased imports by 12.5 percent in 2019. Imports in December dropped to 5,223 tons, and the nation was ranked 16 th among importers during the month. It is hoped that this trade worth $161 million in 2017, $154 million during 2018 and $191 million in 2019 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 2019 receiving 206,451 metric tons representing 6.4 percent of volume and 5.7 percent of value with a unit price of $886 per ton. Taiwan decreased purchases by 13.7 percent in 2019 compared to 2018. Taiwan increased December imports by 24.1 percent compared to the corresponding month in 2018.

Angola was displaced by Taiwan to 4th place in 2019 partly due to a decline in imports during the first two months of the past year. Imports for 2019 attained 166,566 metric tons comprising 5.2 percent of U.S. broiler shipments. This nation reduced their import volume from the U.S. by 20.5 percent for 2019 in comparison with 2018.

Vietnam was ranked 5th as an importing nation in 2019. Volume attained 150,650 metric tons valued at $132.5 million with a unit price of $880 per metric ton. Volume and value during 2019 represented 4.7 percent and 4.1 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 December Viet Nam was the fourth largest importer with 14,023 tons. This was 185 percent higher than in December 2018 and value was up by 264 percent.

The nation of Georgia was ranked 8th among importers in 2019. Volume (115,964 metric tons) and value ($127.7 million) both increased by 118 percent over 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 13th for 2019 importing 88,722 metric tons valued at $76.6 million, lower by 8.8 percent in volume and 12.1 percent in value compared to 2018. Exports to South Africa rose 55.1 percent in December 2019 to 8,907 metric tons compared to December 2018. This represented a trend following November 2019 with shipments totaling 7,472 metric tons 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.

Nations recording double-digit changes in imports during 2019 included Columbia (up 33 percent to 95,742 metric tons); UAE (27 percent to 67,356) and Ghana (26 percent to 53,436). These volumes were offset by declines in imports by the Philippines (down 14 percent ton 113,786 metric tons); Haiti (down 18 percent to 52,649) and Turkey (down 31 percent to 53,436)

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 2019 increased by 4.6 percent and value rose by 8.7 percent compared 2018 with unit value increasing by 3.9 percent from $2,248 per metric ton in 2018 to $2,335 per metric ton in 2019.

Mexico, the leading importer received 60.9 percent of turkey meat shipped during 2019 (176,789 m. tons) 1.5 percent more than during 2018 (173,526 m. tons). Exports to Mexico amounting to $427 million, represented 63.0 percent of the total value of $676 million exported.

Benin, ranked 2nd for 2019 imported 10,369 metric tons of turkey product valued at $13.2 million with a unit price of $1,291 per metric ton. This suggests a low-value product mix comprising mostly MDM, along with 3 rd-ranked South Africa (9,759 metric tons at a unit value of $1,291 per ton). Given reports on smuggling in West Africa, it is presumed that a high proportion of low-value turkey exports to Benin is destined to their Eastern neighbor Nigeria across a porous border.

The U.S. recently concluded a limited trade agreement with Japan that will place U.S. exporters on parity with EU competitors. This should restore the ranking of Japan an importer of 5,273 metric tons during the first 11 months of 2019. Imports were valued at $21.9 million but with a unit price of $4,153 per metric ton.

Collectively for 2019 the Caribbean (including the Dominican Republic) and Central America represented 7.1 percent of turkey meat exports and 6.3 percent of value.

For 2019, South America showed a 136.8 percent increase in volume to 15,470 metric tons and a 120.7 percent increase in value to $37.3 million with an average unit price of $2,411 per ton. This was mainly due to exports to Peru with their volume comprising 52.5 percent of the total imported by the region during 2019. Peru increased volume of turkey imports by 154 percent compared to 2018.

CHICKEN PAWS AND FEET

Exports of chicken paws during 2019 increased by 1.5 percent in volume compared to 2018 to 176,539 metric tons but with a 21.6 percent decline in total value. There was a 22.7 percent decline in unit value to $1,195 per metric ton. Hong Kong imported 94.0 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 poultry 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 and ignored the OIE principle of regionalization. In December 2019 China resumed imports with 536 metric tons shipped. Volume in January 2020 will be restrained by port delays caused by the ongoing outbreak of Hunan coronavirus.

According to the January 22nd USDA Cold Storage Report, the stock level of Paws and Feet on December 31st 2019 increased by 12.9 percent to 35.5 million lbs. compared to December 31st 2018. Subsequent USDA reports will indicate the extent of purchases and shipments to China and the effect on inventory in cold storage.

 

PROSPECTS FOR 2020

The January 16th 2020 Livestock, Dairy and Poultry Outlook Report, projected broiler exports would be 3.375 million metric tons in 2020. The 2020 projection represents 16.4 percent of the 20,636 million metric tons (45,399 million lb.) of broiler RTC to be produced by the U.S. industry.

Projected exports of turkey products by USDA in 2020 will amount to 309,000 metric tons, (680 million lb.), 5.1 percent above 2018 and representing 11.5 percent of 2020 production projected to be 2.693 million metric tons (59,246 million lb.)

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 Parliament of Canada.

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.

Over the past 20 months 473 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 appears to be at an end. 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