Poultry Industry News, Comments & More

Meat Exports

09/06/2019

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

Export data for the first seven months of 2019 indicate a moderate increase in exports of broiler parts in comparison to the corresponding period in 2018. The overwhelming impression from this and progressive monthly comparisons is the consistent erosion in unit price. This is attributed to the fact that leg quarters comprise over 95 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 exports of broiler parts for the period attained 1,838,031 metric tons, 1.3 percent more than the corresponding period in 2018 (1,813,972 metric tons). Total value of exports declined by 1.9 percent to $1,834 million ($1,869 million).

 

During January-July 2019 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 1,977,061 metric tons of chicken parts and other forms (whole and prepared) valued at $2,037 million with a weighted average unit value of $1,030 per metric ton, 1.7 percent higher in unit value compared to the first seven months of 2018 ($1,081 per metric ton).

The NCC breakdown of chicken exports during January-July 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 $964 per metric ton ($1,010)

  • Prepared chicken 2.5%; Unit value $3,573 per metric ton ($3,541)

  • Whole chicken 1.3%; Unit value $1,050 per metric ton ($1,055)

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

PRODUCT

JAN-JULY 2018

JAN-JULY 2019

DIFFERENCE

Broiler Meat

     

Volume (metric tons)

1,813,972

1,838,031

+24,059 (+1.3%)

Value ($ millions)

1,869

1,834

-35 (-1.9%)

Unit value ($/m. ton)

1,030

998

-32 (-3.1%)

Turkey Meat

     

Volume (metric tons)

157,348

164,071

+6,687 (+4.3%)

Value ($ millions)

352

366

+14 (+3.9%)

Unit value ($/m. ton)

2,237

2,231

-6 (-0.3%)

Chicken Paws

     

Volume (metric tons)

99,343

104,749

+5,406 (+5.4%)

Value ($ millions)

158

131

-17 (-10.8%)

Unit value ($/m. ton)

1,590

1,250

-340 (-21.5-3%)

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

EXPORTS OF BROILER PARTS JAN.-JULY 2018

Total broiler parts exports during the first seven months of 2019 compared with the corresponding period in 2018 increased by 1.3 percent in volume but declined 1.9 percent in value. Unit value decreased 3.1 percent from $1,030 per metric ton to $998 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 46.0 percent of shipments during the first seven months of 2019. The top ten importers comprised 64.2 percent of the total volume.

Mexico was the largest importer of broiler meat from the U.S. during the seven-month period with a volume of 391,341 metric tons representing 21.3 percent of volume and 19.2 percent of total value at a unit price of $900 per metric ton. Unit value during July 2019 rose 26.1 percent to $979 per m. ton compared with July 2018 with a 15.8 percent higher volume total value increased by 46.1 percent.

Cuba advanced to become the 2nd ranked importer during Jan.-July 2019 with 8.2 percent of volume (115,111 metric tons) but 6.7 percent of value ($122.5 million) attributed to the product mix with a unit price of $810 per metric ton. Cuba increased imports by 138.6 percent in July 2019 (33,842 metric tons) compared to July 2018 and 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.

Taiwan was the 3rd ranked broiler meat importer during Jan-July 2019 receiving 129,968 metric tons representing 7.1 percent of volume and 6.1 percent of value with a unit price of $849 per ton. Taiwan decreased purchases by 4.1 percent for the seven-month period in 2019 compared to 2018.

Angola was displaced by Taiwan for 4th place in Jan.-July after a decline in imports during the first two months of 2019. Imports for seven months attained 78,081 metric tons comprising 4.3 percent of U.S. broiler shipments. This nation reduced their import volume from the U.S. by 24.4 percent for the period in comparison with the first seven months of 2018.

Vietnam was ranked 5th as an importing nation over the first seven months of 2019. Volume attained 78,081 metric tons valued at $66.3 million with a unit price of $849 per metric ton. Volume and value during the period represented 4.2 percent and 3.6 percent of U.S. exports respectively. Shipments may soon increase due to reduced availability of pork due to an extensive and probably uncontrollable outbreak of African swine fever.

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 continued to be ranked 10th for the first seven months of 2019 importing 54,771 metric tons valued at $46.8 million, lower by 9.6 percent in volume and 14.6 percent in value compared to Jan.-July 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 restored imports with South Africa ranking 11th for the month of June with volume attaining 7,102 metric tons. In July volume dipped to 6,158 metric tons, 50.0 percent less than in July 2018. As an incidental issue it is apparent that leg quarters exported to South Africa are transshipped to neighboring nations including Mozambique.

Georgia was a noteworthy importer over the first seven months of 2019. Volume and value increased respectively by 210.1 and 183.4 percent

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 seven months of 2019 increased by 4.3 percent and value rose by 3.9 percent compared to Jan.-July 2018 despite unit value decreasing fractionally by 0.3 percent from $2,237 per metric ton to $2,231 per metric ton.

Mexico, the leading importer received 58.2 percent of turkey meat shipped during Jan.-July 2019 (95,509 m. tons) 7.7 percent less than in the corresponding period in 2018 (103,438 m. tons). Exports to Mexico ($219 million) represented 59.8 percent of the total value of $366.2 million exported.

South Africa ranked 3rd for Jan.-July 2019 importing 7,622 m. tons valued at $10.2 million or $1,338 per metric ton, suggesting a low-cost product mix in common with 2nd-ranked Benin ($1,276 per ton), presumably including a high proportion of MDM.

Japan ranked 5th over the seven-month period in 2019 with 3,702 metric tons valued at $16.3 million with a unit value of $2,114 per ton

Collectively for 2018 the Caribbean (including the Dominican Republic) and Central America represented 7.2 percent of turkey meat exports and 6.3 percent of value.

South America showed a 229 percent increase in volume (10,000 metric tons) and a 190 percent increase in value to $24.5 million with an average unit price of $2,426 per ton. This was mainly due to Peru representing 56.3 percent of the total volume imported by the region during the first seven months of 2019 ,

CHICKEN PAWS AND FEET

Exports of chicken paws during the first seven months of 2019 increased by 5.4 percent in volume compared to 2018 with 104,749 metric tons but with a 10.8 percent decline in total value. There was a 21.3 percent decline in unit value to $1,250 per metric ton. Hong Kong imported 93.6 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 August 22nd USDA Cold Storage Report, the stock level of Paws and Feet on July 31st 2019 decreased by 26.9 percent to 27.6 million lbs. compared to July 31st 2018.

 

PROSPECTS FOR 2019 and 2020

The August 16th 2018 Livestock, Dairy and Poultry Outlook Report, projected broiler exports would be 3.237 million metric tons in 2019 and 3,295 in 2020. The projection for 2019 represents16.4 percent of the 19.687 million metric tons of RTC to be produced by the U.S. industry.

Projected exports of turkey products in 2019 will amount to 267,500 metric tons, 2.5 percent above 2018 and representing 10.7 percent of 2019 production projected to be 2.675 million metric tons. For 2020 exports are projected at 286,000 metric tons, 10.6 percent of anticipated production of 2.695 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. 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 Mexico.

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 $571.3 million for the first seven months of 2019.

Over the past 14 months 490 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