U.S. Broiler and Turkey Exports for January 2023.                   

OVERVIEW

Total exports of bone-in broiler parts and feet during January 2023 attained 313,629 metric tons, 9.8 percent more than in January 2022 (285,591 metric tons). Total value of broiler exports declined by 0.3 percent to $374.6 million ($375.6 million).

Total export volume of turkey products during January 2023 attained 12,098 metric tons, 26.6 percent less than in January 2022 (16,471 metric tons Jan. 2021). Total value of turkey exports declined by 27.6 percent to $42 million (55 million Jan. 2021).

Unit price for the broiler industry is constrained by the fact that leg quarters comprise over 97 percent of broiler meat exports by volume (excluding feet). From the first quarter of 2021 to date, unit value of leg quarters increased consistent with international demand but with a decline in January 2023 compared to the previous month. Leg quarters represent a relatively low-value undifferentiated 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 outbreaks of African swine fever in China and Southeast Asia from early 2019 onwards coupled with disruptions in chicken production and logistics thereafter due to COVID restrictions, increased demand for protein with international repercussions on trade in chicken and pork. The demand for pork imports to China has diminished as hog production is restored and mild overproduction is evident in the white-feathered broiler sector with implications for exports other than feet during 2033.

EXPORT VOLUMES AND PRICES FOR BROILER MEAT

During January 2023 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 315,435 metric tons of chicken parts and other forms (whole and prepared) valued at $5,381 million with a weighted average unit value of $1,208 per metric ton,.

The NCC breakdown of chicken exports for January 2023 by proportion and unit price for each category compared with the corresponding month in 2022 (with the unit price in parentheses) comprised:-

• Chicken parts                          97.7%; Unit value  $1,149 per metric ton  ($1,279)
• Prepared chicken                      1.8%; Unit value  $4,183 per metric ton  ($3,528)
• Whole chicken                          0.5%; Unit value  $1,621 per metric ton  ($965) 

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports in January 2023 compared to January 2022:-

             COMPARISON OF U.S. CHICKEN EXPORTS JANUARY 2022 AND 2023

BROILER EXPORTS

Total broiler parts, predominantly leg quarters but including feet, exported during January 2023 as compared with January 2022 increased by 9.8 percent in volume but declined 0.3 percent in value. Unit value was 9.2 percent lower at $1,196 per metric ton.

Broiler imports in 2022 were projected to attain 80,200 metric tons (176 million lbs.) falling to 72,000 metric tons (160 million lbs.) in 2023.

The top five importers of broiler meat represented 52.9 percent of shipments during January 2023. The top ten importers comprised 68.5 percent of the total volume reflecting concentration among the significant importing nations.

During January 2023 exports of all broiler products to first-ranked (by value) China were 21.2 percent lower by volume to 40,427 metric tons and 30.7 percent lower by value at $66 million compared to January 2022. Volume and value of exports to China represented 12.9 percent and 17.5 percent respectively with an average unit price of $1,620 per metric ton. The average unit price for all exports to China in 2022 was $1,747 per ton compared with $1,376 per ton for all exports, but excluding China, $1,397 per ton, demonstrating the weighting of feet on export value.

According to USDA statistics during 2022 feet accounted for 77.7 percent of volume at 483,538 metric tons, valued at $931 million with a unit price of $1,925 per metric ton. Other broiler products exported to China during 2022 included legs and leg quarters at 17.0 percent of volume with a unit price of $901 per ton. Due to HPAI restrictions monthly volumes of feet have declined by double digits on a Y-O-Y comparison. The USAPEEC note that 37 states with 444 of 577 approved plants and cold storage installations are ineligible to export to China. Other products shipped to China including wings and edible giblets comprising 5.3 percent of volume and 5.5 percent of value at a unit price of $2,862 per metric ton.

During January 2023 Mexico was the first-ranked importer by volume with 63,125 metric tons representing 20.1 percent of export volume down 22.0 percent from January 2022. Value at $60 million was 16.0 percent of the total for exported broiler products during January 2023 and down 1.6 percent from January 2022, with an 18.9 percent decline in unit price to $947 per metric ton. 

During January 2023 nations gaining in volume compared to the corresponding period in 2022 (with the percentage change indicated) in descending order of volume were:-

Mexico, (+22%); Cuba, (+54%); Angola. (+9%); Guatemala, (+7); Canada, (+10%); Haiti, (+36%); Congo-Brazzaville, (+49%); Iraq, (+337%) and Viet Nam, (+7%);

Losses during January 2023 offset gains in exports with declines for:-

China, (-21%); Taiwan, (-9%); and Philippines, (-24%).

TURKEY EXPORTS

The volume of turkey meat exported during January 2023 decreased by 26.6 percent to 12,098 metric tons from January 2022 and value fell by 27.6 percent to $42 million compared to January 2022 Average unit value declined by 1.4 percent from $3,521 per metric ton to $3,472 per metric ton. Imports of turkey products are projected to rise to 38,640 metric tons in 2023.

For the entire year of 2022 export volume declined by 25.6 percent to 184,537 metric tons compared to 2021 and value fell by 3.6 percent to $642 million reflecting a 1.4 percent decrease in unit value to $3,473 per metric ton.

During January 2023 only Canada gained in volume posting a seven percent increase over January 2022. Volume to Mexico declined by 23 percent; to Benin (effectively Nigeria) by 46 percent, China by 33 percent and Guatemala by 24 percent.

PROSPECTS FOR 2023

The March 14th 2023 Livestock, Dairy and Poultry Outlook Report, updated 2023 exports of broiler products to 3.325 million metric tons (7,315 million lbs.). This value represents 15.6 percent of the projected production of 21.277 million metric tons (46,750 million lb.) of broiler RTC by the U.S. industry.

Projected export of turkey products in 2023 will be 163,600 metric tons, (360,000 million lbs.) or 6.4 percent of annual production of 2.539 million metric tons (5,585 million lbs.).

It is important to recognize that exports of chicken and turkey meat products to our USMCA partners amounted to $1,264 million in 2021 and $1,647 million during 2022. It will be necessary for all three parties to the USMCA to respect the terms of the agreement since punitive action against Mexico or Canada on issues unrelated to poultry products will result in reciprocal action by our trading partners to the possible detriment of U.S. agro-industries.

 The emergence of H5N1strain avian influenza virus with a Eurasian genome in migratory waterfowl in all four Flyways was responsible for sporadic outbreaks of avian influenza in backyard flocks and serious commercial losses in egg-producing complexes and turkey flocks but to a minimal extent in broilers. The probability of outbreaks of HPAI over succeeding weeks appears likely but will be a function of continuous shedding by migratory and domestic birds and mammals. The extent of protection of commercial flocks at present relies on intensity and efficiency of biosecurity, representing investment in structural improvements and operational procedures. To date 3.2 million broilers on 18 farms in 7 states and in excess of 9.8 million turkeys on 231 farms in 7 states have been depleted as a result of HPAI.

The application of restricted county-wide embargos following the limited and regional cases of HPAI in broilers with restoration of eligibility 28 days after decontamination has supported export volume for the U.S. broiler industry. Exports of turkey products have been more constrained with plants processing turkeys in Minnesota, the Dakotas, Wisconsin and Iowa impacted.  Most nations are now lifting embargos that were previously placed on entire states or counties as the WOAH (OIE) mandated post-decontamination period expires.

The live-bird market system supplying metropolitan areas, the presence of numerous backyard flocks, fighting cocks and commercial laying hens allowed outside access, potentially in contact with migratory and now some resident bird species, all represent an ongoing danger to the entire U.S. commercial industry. The live-bird segments of U.S. poultry production represent a risk to the export eligibility of the broiler and turkey industries notwithstanding compartmentalization for breeders and regionalization to counties or states for commercial production.

Updated USDA-ERS Poultry Meat Projection for March 2023.

On March 14th 2023 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2021 (actual), an update for 2022 and a projection for 2023.

Broiler RTC production in 2022 was almost unchanged in the March 2023 report at 46,206 million lbs. RTC (21.003 million metric tons.). Per capita consumption in 2022 will be 98.9 lbs. (45.0 kg.). Exports will represent 15.8 percent of RTC production in 2022 attaining 7,278 million lbs. (3.308 million metric tons) comprising RTC leg quarters, other products and feet.

The 2023 projection for broiler production is 46,750 million lbs. (21.250 million metric tons) up 1.2 percent from 2022. USDA projects per capita consumption of 100.2 lbs. (45.5 kg.), up 1.3 percent from 2022 with exports of 7,315 million lbs. (3.325 million metric tons), 0.5 percent above the previous year.

Turkey production for 2022 will be 5,222 million lbs. (2.374 million metric tons) RTC. The March 2023 projection for per capita consumption will be unchanged from 2021 at 14.6 lbs. (6.6 kg.), despite extensive promotions and introduction of further-processed items. Export volume for 2022 will attain 408 million lbs. (0.185 million metric tons). Values for production and consumption of RTC turkey for 2022 are considered to be realistic, given the prevailing economy, variable weekly poult placements, production levels, losses from HPAI and inventories.

The March 2023 USDA projection for the turkey industry included annual production of 5,585 million lbs. (2.539 million metric tons), up 7.0 percent from 2022 with consumption of 15.9 lbs. (7.2 kg.) per capita, up 8.9 percent from the previous year. Export volume will decline by 11.8 percent in 2023 to 360 million lbs. (163,000 metric tons).

Production values for the broiler and turkey segments of the U.S. poultry meat industry are tabulated below:-

Source: Livestock, Dairy and Poultry Outlook released March 14th 2023

Export projections do not allow for a breakdown in trade relations with existing major partners including Mexico and China nor the impact of catastrophic diseases including HPAI and vvND in either the U.S. or importing nations

The USDA projection takes into account declining broiler product exports to China. For 2022, China imported 622,099 tons of broiler products valued at $1,087 million including feet at an average unit price of $1,263 per ton. Feet represented 77.8 percent of volume over 2022 (483,538 metric tons) at a unit price of $1,926 per ton.

Subscribers are referred to the monthly update of production and cold storage inventories of broilers and turkeys posted in each end of month edition of CHICK-NEWS with the previous monthly data under the STATISTICS tab.

Animal Equality, a welfare activist organization, has filed a complaint with the European Commission claiming that fast-growing broilers represent a violation of Article 13 of the Lisbon Treaty, recognizing animals as “sentient beings”.  Citing European Directive 98/58/EC, Animal Equality submitted data to the European Parliament and the Commission suggesting that fast-growing and high-yield strains are subject to skeletal disorders.

The European Commission responded indicating that welfare legislation will be updated in the light of scientific evidence.  The European Food Safety Authority is the body responsible for assessing claims and providing opinions that guide legislation.

The submission to the European Commission is heavy on sentiment, quoting, “This is why it is necessary to put an end to the exploitation of fast-growing chickens which are condemned from birth to be prisoners of their own bodies for the profit of the meat industry.”

Animal Equality has campaigned against intensive poultry production for two decades. As with kindred organizations in North America, members of the organization undertake undercover investigations and intrusion onto farms to gather images used to solicit funds and to oppose intensive livestock production.

A consumer has filed a lawsuit alleging that Buffalo Wild Wings Inc. has engaged in deceptive advertising.  The Chicago resident claims that ‘boneless wings’ are slices of chicken breast meat that have been deep-fried. The plaintiff claims that the term ‘boneless wings’ is an incorrect descriptor and represents false advertising.  The lawsuit claimed that “customers should be able to rely on the plain meaning of a product’s name and receive what they are promised”.

In response to the lawsuit, Buffalo Wild Wings confirmed the allegation but claims that deceptive descriptions of menu items are common in the restaurant industry.  They state that the company’s “buffalo wings do not contain buffalo and that hamburgers have no ham”.  This flippant response containing an admission of the validity of the plaintiff’s claim, presumes a settlement in what is obviously shakedown litigation.  It will, however, be up to the plaintiff to quantify the magnitude of his alleged financial injury.

At best, Buffalo Wild Wings and other servers of faux wings will have to find a new name for their menu offering.

On March 14th, Tyson Foods Inc. announced the closure of the Van Buren, AR and the Glen Allen, VA complexes. It is intended to transfer growing and processing activities to other complexes to reduce production costs.

This action will impact approximately 1,600 jobs. Tyson Foods is working with state and local agencies to provide assistance to workers who will not move to accept positions at other Tyson complexes.

In a company statement, Tyson noted, "while the decision was not easy, it reflects our broader strategy to strengthen our poultry business by optimizing operations and using the full available capacity at each plant.

Mark Federici, President of the United Food and Commercial Workers Local 400 Union representing Glen Allen workers stated, "it has been our honor and privilege to represent the workers at this plant for decades and we were appalled by today's news and the terrible impact it will have on close to 700 of our Union members".

Chick-fil-A Inc. has formed a subsidiary to erect and operate a distribution center in Olathe, KS.  This will be the 5th distribution unit in a series established by the privately-held QSR chain and will commence operation in 2024.  The facility will employ more than 60 workers and will be owned and managed by a Chick-fil-A Supply Inc.

In 2013, the WH Group acquired Smithfield Foods for $4.7 billion, representing the largest acquisition by China of a U. S. company.  The transaction was approved by the Committee on Foreign Investment in the U. S. that found no national-security risk from the purchase.

In recent weeks there has been growing concern over China represented by military aggression, support of the Russian Federation, the apparent danger of Tik Tok and the spy balloon episode, all solidifying opposition to China our greatest strategic and commercial adversary.  Politicians are now questioning the wisdom of China owning a major agri-business enterprise, slaughtering 30 million hogs annually and representing an important component of the food supply chain.

Senator Tom Cotton (R-AR) noted, “From purchasing fields and pastures to gobbling up companies like Smithfield, Chinese influence in American agriculture means that China’s needs, not America’s, come first”. This somewhat inflammatory statement is at variance with fact since the WH Group only acquired a small acreage with their acquisition of Smithfield plants.

Shane Smith, CEO of Smithfield, has devoted considerable time meeting with legislators and officials in Washington, assuring them of the independence of Smithfield and its commitment to the U. S.  All pork products sold by the company are derived from hogs bred, raised and processed in the U. S.

Smith pointed to an increase in annual sales from $13 billion to $18 billion following the acquisition 10 years ago. This is a meager three percent per year and clearly below the rate of inflation. He pointed to the fact that the company has hired 3,000 more employees in the U. S. and expanded into other meat categories. Smith noted that the acquisition has resulted in export of some new products to China including bacon. Smithfield supplies by-products comprising heads and feet, that are traditionally consumed in China but have no markets in the U.S.