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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-June 2019

08/09/2019

Export data for the first half of 2019 indicates a moderate increase in export of broiler parts in comparison to the corresponding period in 2018. The overwhelming impression from this and previous comparisons is the consistent erosion in unit price. This is attributed to the fact that leg quarters comprise over 90 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. Leg quarters are vulnerable to trade disputes and embargos based on real or contrived disease restrictions.

Total broiler exports for the period attained 1,562,922 metric tons, 1.0 percent more than the corresponding period in 2018 (1,458,159 metric tons). Total value of exports declined by 4.6 percent to $1,529 million ($1,603 million).

During January-June 2019 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 1,678,408 metric tons of chicken parts and other forms (whole and prepared) valued at $1,701 million with a weighted average unit value of $1,013 per metric ton, 6.7 percent lower in value compared to the first six months of 2018 ($1,086 per metric ton).

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

  • Chicken parts 96.2%; Unit value $944 per metric ton ($1,014)

  • Prepared chicken 2.6%; Unit value $3,550 per metric ton ($3,535)

  • Whole chicken 1.2%; Unit value $1,038 per metric ton ($1,065)

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

 

PRODUCT

JAN-JUNE 2018

JAN-JUNE 2019

DIFFERENCE

Broiler Meat

     

Volume (metric tons)

1,548,159

1,562,922

+14,763 (+1.0%)

Value ($ millions)

1,603

1,529

-74 (-4.6%)

Unit value ($/m. ton)

1,035

978

-57 (-5.5%)

Turkey Meat

     

Volume (metric tons)

135,975

141,698

+5,723 (+4.2%)

Value ($ millions)

304

311

+7 (+2.3%)

Unit value ($/m. ton)

2,225

2,150

-75 (-3.4%)

Chicken Paws

     

Volume (metric tons)

81,200

85,942

+4,742 (+5.8%)

Value ($ millions)

130

108

-22 (-16.9%)

Unit value ($/m. ton)

1,601

1,257

-344 (-21.5%)

 

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

EXPORTS OF BROILER PARTS JAN.-JUNE 2018

Total broiler parts exports during the first half of 2019 compared with the corresponding period in 2018 increased by 1.0 percent in volume but declined 4.6 percent in value. Unit value decreased 5.5 percent from $1,035 per metric ton to $978 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 45.5 percent of shipments during the first six months of 2019. The top ten importers contributed 63.8 percent of the total volume.

Mexico was the largest importer of broiler meat from the U.S. during the six-month period with a volume of 328,505 metric tons representing 21.0 percent of volume and 19.0 percent of total value at a unit price of $885 per metric ton. Unit value during June 2019 rose 23.1 percent to $1,002 per m. ton compared with June 2018. Despite a 0.3 percent lower volume total value increased by 23.5 percent.

Taiwan was the 2nd ranked broiler meat importer receiving 118,647 metric tons representing 7.6 percent of volume and 6.5 percent of value with a unit price of $840 per ton. Taiwan decreased purchases by 19.8 percent in June 2019 compared to 2018 resulting in Taiwan falling to 5 th rank among importers during the month.

Cuba continued as the 3rd ranked importer during Jan.-June 2019 with 7.5 percent of volume (118,647 metric tons) but 6.0 percent of value ($91.5 million) attributed to the product mix with a unit price of $780 per metric ton. Cuba reduced imports by 6.5 percent in June 2019 (21,401 metric tons) compared to June 2018 but retained 2nd rank among destinations during the month. 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.

Angola displaced Vietnam for 4th place in Jan.-June after a decline in imports during the first two months of 2019. Imports attained 75,731 metric tons comprising 4.8 percent of U.S. broiler shipments. This nation reduced their import volume from the U.S. by 27.9 percent for the period in comparison with the first half of 2018.

Vietnam was ranked 5th as an importing nation over the first six months of 2019. Volume attained 71,418 metric tons valued at $59.3 million with a unit price of $830 per metric ton. Volume and value during the period represented 4.6 percent and 3.9 percent of U.S. exports respectively.

South Africa was the subject of considerable litigation and Congressional pressure in 2015 and in 2016. The nation ranked 10th 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 10 th for the first six months of 2019 importing 48,613 metric tons valued at $46.7 million, higher by 0.7 percent in volume but 7.7 percent lower in value compared to Jan.-June 2018. South African domestic producers continue to aggressively oppose imports from the U.S., the E.U. and Brazil applying both legal and political pressure. Prospects for continued exports to the RSA were restored by exempting the Nation from tariffs on steel and aluminum in accordance with the AGOA on which the 2016 importation agreement was based. Results for April through June 2019 suggest that removal of U.S. duties on steel and aluminum have restored imports with South Africa ranking 11th for the month of June with volume attaining 7,102 metric tons. As an incidental issue it is apparent that leg quarters exported to South Africa are transshipped to neighboring nations including Mozambique.

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 six months of 2019 increased by 4.2 percent and value increased compared to Jan.-June 2018 despite unit value decreasing by 1.8 percent from $2,236 per metric ton to $2,195 per metric ton.

Mexico, the leading importer received 57.6 percent of turkey meat shipped during Jan.-June 2019 (81,572 m. tons) 9.5 percent less than in the corresponding period in 2018 (90,158m. tons). Exports to Mexico ($184 million) represented 59.0 percent of the total value of $310.5 million exported.

In June Peru emerged as the 2nd ranked importer with a sharp increase in volume to 1,000 m. tons (109 m. tons in June 2018) valued at $2.9 million with a unit value of $2,900 per m. ton

South Africa ranked 3rd for Jan.-June 2019 importing 7,340 m. tons valued at $9.9 million or $1,348 per metric ton, suggesting a low-cost product mix in common with Benin, presumably including a high proportion of MDM.

Collectively for 2018 the Caribbean (including the Dominican Republic) and Central America represented 7.5 percent of turkey meat exports and 6.5 percent of value.

CHICKEN PAWS AND FEET

Exports of chicken paws during the first six months of 2019 increased by 5.8 percent in volume compared to 2018 at 85,942 metric tons but with a 16.9 percent decline in total value. There was a 21.5 percent decline in unit value to $1,257 per metric ton. Hong Kong imported 94.0 percent of leg and paw shipments.

Trade in feet and paws 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.

According to the July 22nd USDA Cold Storage Report, the stock level of Paws and Feet on June 30th 2019 decreased by 28.9 percent to 26.1 million lbs. compared to June 30th 2018.

 

PROSPECTS FOR 2019 and 2020

The July 17th 2018 Livestock, Dairy and Poultry Outlook Report, projected broiler exports would be 3.244 million metric tons in 2019 and 3,295 in 2020. The 2019 projection represents16.6 percent of 19.595 metric tons of RTC to be produced by the U.S. industry.

Projected exports of turkey products in 2019 will amount to 285,000 metric tons, 2.5 percent above 2018 and representing 10.7 percent of 2019 production projected to be 2.666 million metric tons. For 2020 exports are projected at 286,000 metric tons, 10.7 percent of anticipated production of 2.682 million metric tons.

The Administration successfully renegotiated NAFTA into a new trilateral agreement termed the USMCA on September 30th. This agreement must still be ratified by the legislatures of Canada and the U.S. Recent action in removing tariffs on steel and aluminum and an agreement with Mexico regarding migrants led to ratification of the USMCA by Mexico.

It is important to recognize that exports of chicken and turkey products to our NAFTA partners amounted to $1.288 billion in 2017 and $1.279 billion in 2018 and $645 million for the first sixth months of 2019.

Over the past 14 months approximately 480 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 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 during the past four months. 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