The September USDA-ERS projection for the export of U.S. broiler products in 2024 was 6,776 million lbs. (3.075 million metric tons), down 6.8 percent from 2023.  The forecast for 2025 is for 6,875 million lbs. (3.125 million metric tons) equivalent to 14.5 percent of production.  For the first eight months of 2024, Mexico represented 22.2 percent of export volume followed by Cuba with 7.8 percent and Taiwan 6.1 percent.

The forecast for 2025 may however be influenced by factors beyond the control of the industry.

China, previously the principal importer ranked highly in both volume and especially value, has declined in importance and for the first eight months of 2024 was ranked fifth in volume with five percent of exports but was still the second largest importer by value.  It is clear that this nation may play a significant role in future exports depending on the outcome of the 2024 Presidential election and developing global events.  Should a new administration intensify tariffs on China, exports amounting to 405,313 metric tons valued at $711,172 in 2023 and 108,502 metric tons valued at $247 million for the first eight months of 2024 may be sharply lower.  China has in any event reduced imports due to over production of domestic pork and attaining self-sufficiency in broiler meat derived from white-feathered birds and hybrids.  Although there will be a demand for feet, it appears that there is a trend to diverting imports through Hong Kong to the mainland.  If it is politically expedient, as a countervailing action to U.S. tariffs, consumers in China may have to do without their U.S.-origin feet if the Central Party so decrees.

China may also play a role in constraining exports to Taiwan.  During mid-October the greatly expanded navy of the Peoples Liberation Force conducted a mock embargo of Taiwan that would effectively have prevented imports of oil required to generate power and to receive food shipments.  Third ranked Taiwan over the first eight months of 2024 imported 131,229 metric tons and represented 6.3 percent of our export volume. This would be placed in jeopardy in the event of a confrontation with China over the independence of the island Nation.

Conflict between Israel, and our adversary Iran and its terrorist surrogates in Gaza, Lebanon, Syria and Yemen might broaden into an international conflict impacting exports to the Middle East and other nations especially if there are additional restrictions on shipping over and above the present situation in the southern Red Sea and Gulf of Aden.  Any major conflict in the Mideast involving hostilities between Saudi Arabia and the Gulf states on the one hand and Iran backed by China and the Russian Federation would inevitably drive up the price of crude.  Current production costs are in part restrained by the prevailing low price of crude that has ranged from $70 to $80 per barrel in 2024.  Escalation in the price of WTI with a $100+ handle would increase costs and shrink margins as energy-driven inflation returns.

The potential emergence of HPAI in Brazil could also affect exports of U.S. broiler products. During 2023 Brazil recorded 166 cases of H5 N1 HPAI in wild birds along the eastern coast and three reported cases in backyard flocks but miraculously, no commercial farms.  In addition, authorities in Brazil reported a case of “Newcastle disease” in mid-July in the State of Rio Grande do Sul.  Whether this was in fact END or a cover-up for an isolated HPAI break in a small broiler unit will probably never be determined.  Based on the previous reluctance of Brazil to disclose outbreaks of spontaneous bovine spongiform encephalopathy (BSE), and the implications of an HPAI diagnosis on exports, the true diagnosis remains a speculation.

Broiler exports over the first eight months of 2024 were over 10.7 percent lower than for the corresponding period during the previous year.  Exports in 2023 were four percent lower than in 2022 principally due to reduced shipments to China although there is a general trend for traditional importers, with the exclusion of Mexico and Canada, to have lowered imports from the U.S. This is based on increasing self-sufficiency, decreased demand attributed to deteriorating economies and greater competition from Brazil, Eastern Europe and Russia.

Our USMCA partners represent 27 percent of exports.  This quantity might be at risk in the event of imposition of punitive duties on automobiles and parts produced in Mexico, as hinted in pre-election political rhetoric. This would require re-negotiation or worse still a precipitous cancellation of the USMCA by any future Administration.

Given uncertainties and faced with declining exports, the broiler industry should look within the U.S. and establish a wider domestic market for leg quarters.  This will require development of new products incorporating dark meat favored among the nations receiving broiler leg quarters. This category comprised 96 percent of export volume for RTC broiler products and 89.8 percent of value ($2.81 billion) over the first eight months of 2024.

While there will always be a demand for low-priced leg quarters, ($1,327 per metric ton 2024   Y-T-D), unit value and margin could be enhanced by further processing and incorporation into high value protein products that could displace pork and beef.

The U.S. broiler industry cannot assume continued profitable exports of broiler leg quarters.  Geopolitical factors may impact both demand and logistics requiring long-term alternatives to exporting what is effectively a commodity, susceptible to embargos, higher shipping costs and lacking in pricing power.