Chickens

U.S. poultry exports are increasing in major markets like China and Mexico, despite and even because of the coronavirus pandemic.

That’s good news for an industry that has spent the past five years recovering from the Midwest avian influenza outbreak in which 48 million birds were killed.

Broilers are the U.S.’ top poultry export, and this year they are chasing the record of 3.5 million metric tons set in 2008.

“Depending on how China goes, we could actually come very close to that level. For a while we thought we were going to beat it,” said Jim Sumner, president of the USA Poultry & Egg Export Council.

Sumner spoke during Penn State’s virtual Pennsylvania Poultry Sales and Service Conference on Sept. 15.

As it is for many agricultural commodities, China is a key market for U.S. poultry.

That market was closed for four years following the avian influenza outbreak concentrated in Iowa and Minnesota.

But since China reopened to American chicken last November, it’s become one of the top customers, buying 12% of broiler exports.

Had coronavirus restrictions not caused problems at the Chinese ports early in the year, Sumner said, the country would likely be America’s top broiler customer.

As it is, Mexico is No. 1, buying 19% of U.S. chicken exports.

Those aren’t the only countries that can’t seem to get enough U.S. chicken. Taiwan and Vietnam are expected to hit records this year.

Cuba remains the U.S.’ fifth largest broiler export market.

“We are basically the only U.S. agriculture commodity that can ship to Cuba,” Sumner said. “They can buy chicken from us cheaper than they can from any other place in the world, including producing it themselves.”

Egg exports have also been on a roll this year. They were up 20% in volume and 12% in value through July.

“I’ve never seen egg exports take such a jump,” Sumner said.

Exports are a small part of the egg market — only 3 to 4% of production goes abroad — but it’s still enough to help prices.

One key reason for the export bump is that Mexico, which buys a third of U.S. table egg exports, has increased its purchases 150%.

Mexican consumers appear to have stocked up on eggs in response to the coronavirus shutdowns imposed earlier this year.

“Eggs started flying off the Mexican store shelves like they were here in the United States,” Sumner said.

Sumner expects the strong demand from Mexico to continue.

The pandemic has also boosted U.S. egg sales to Hong Kong. China is normally the territory’s main protein supplier but has scaled back as part of its COVID-19 response, Sumner said.

The other big development for eggs is the U.S.’ revised free trade agreement with Japan.

Egg duties were slashed, bolstering the U.S.’ competitiveness with Europe. U.S. egg sales to Japan are up almost 40% this year, Sumner said.

Despite the strong showing for broilers and eggs, turkey exports have dipped a little this year.

The falloff is a reflection of problems at U.S. processing plants and in the economies of major export markets, Sumner said.

Mexico buys a whopping 65% of U.S. turkey exports. The next largest markets are China, Canada, the Dominican Republic, South Africa and Jamaica.

And despite the progress made through trade agreements, some massive markets remain problematic.

Sumner doubts the U.S. will ever forge a free trade agreement with the European Union because the bloc has been hard to negotiate with.

And though the U.S. pried open poultry exports to India two years ago, chicken has not been a big seller because it carries a 100% duty.

“If we could get it down to around 20 or 30%, it would be a really phenomenal market for us,” Sumner said. “And India is certainly starting to consume more poultry, and it’s much more than just a vegetarian country these days.”

Still, the biggest factor in poultry exporting is not trade agreements. It’s animal diseases, as the poultry industry knows all too well.

Avian influenza slammed the Midwest just after the U.S. exported a record $6 billion in poultry in 2014.

The outbreak has since cost the U.S. over $4 billion in lost export sales, Sumner said.

This year, the disease resurfaced in low pathogenic form in a North Carolina flock and in highly pathogenic form in South Carolina.

Both outbreaks were limited, but the U.S. still lost markets in 49 countries. Ten nations remain in the process of lifting their restrictions, Sumner said.

In the 2015 outbreak, cleaning and disinfecting farms proved to be so costly for USDA to do directly that it now contracts that work out to the growers.

Export markets usually won’t reopen until 90 days after the farm is cleaned and disinfected.

That reopening can get held up if the farmer takes a long time to clean up the site, as happened at the North Carolina farm this year. USDA is looking at how to improve that procedure, Sumner said.

Avian influenza isn’t the only disease that can shut off foreign markets. A July report of egg drop syndrome in Pennsylvania disrupted exports to Cuba.

The poultry industry has agreed not to ship any of its meat from Pennsylvania to Cuba for the time being, but USDA scientists are also researching whether egg drop syndrome can be spread by frozen poultry.

If there’s no threat, the U.S. might be able to get Cuba to relax its policy, Sumner said.

Then there’s African swine fever. It’s no danger to birds, but the disease’s brutal toll on the pork supply in China has expanded export opportunities for both the U.S. pork and poultry industries.

In the Phase One trade deal, China agreed to narrow the scope of import bans in response to animal diseases.

If avian influenza is found again in America, China will now block imports from only the affected region, not the whole United States.

“Of course, we only had to wait until April for that to prove itself out with South Carolina. And China was good to its word,” Sumner said.

Besides containing almost a fifth of the world’s population, China holds a unique appeal for poultry producers: It’s about the only place where the U.S. can sell chicken feet other than the rendering plant.

In the months since China began accepting U.S. poultry again, about 40% of China’s imports were chicken paws — the feet without the lower leg attached — and much of the rest was leg meat, Sumner said.

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