Poultry Industry News, Comments & More

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

06/07/2019

Export data for the first four months of 2019 indicate a moderate decline 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 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 broiler exports for the period attained 1,027,603 metric tons, 1.1 percent less than the corresponding period in 2018 (1,039,280 metric tons). Total value of exports declined by 11.7 percent to $957 million ($1,069 million).

During January-April 2019 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 1,104,422 metric tons of chicken parts and other forms (whole and prepared) valued at $1,074 million with a weighted average unit value of $973 per metric ton, 9.9 percent lower in value compared to the first four months of 2018 ($1,080 per metric ton).

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

  • Chicken parts 96.1%; Unit value $899 per metric ton ($1,008)

  • Prepared chicken 2.8%; Unit value $3,516 per metric ton ($3,848)

  • Whole chicken 1.1%; Unit value $1,011 per metric ton ($1,070)

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

 

PRODUCT JAN.-APRIL 2018 JAN.-APRIL 2019 DIFFERENCE

Broiler Meat

Volume (metric tons) 1,039,280 1,027,603 -11,677 (-1.1%)

Value ( $ million) 1,069 957 -112 (-10.5%)

Unit value ( $/m. ton) 1,033 931 -102 (-9.9%)

Turkey Meat

Volume (metric tons) 92,579 91,691 -888 (-1.0%)

Value ($ million) 206 194 -12 (-5.8%)

Unit value ($/m. ton) 2,225 2,116 -109 (-2.4%)

Chicken Paws

Volume (metric tons) 55,069 55,979 +910 (+1.7%)

Value ($ million) 89.3 69.7 -19.6 (-22.0%)

Unit value ($/m. ton) 1,622 1,246 -376 (-23.2%)

COMPARISON OF U.S. POULTRY MEAT EXPORT DATA FOR JAN.-APRIL

2019 COMPARED TO JAN.-APRIL 2018

EXPORTS OF BROILER PARTS JAN.-APRIL 2018

Total broiler parts exports in Jan.-April 2019 compared with the corresponding period in 2018 declined by 1.1 percent in volume and 10.5 percent in value. Unit value decreased 9.9 percent from $1,069 per metric ton to $931 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 45.0 percent of shipments during the first four months of 2019. The top ten importers contributed 62.9 percent of the total volume.

Mexico was the largest importer of broiler meat from the U.S. during the four-month period with a volume of 214,038 metric tons representing 20.8 percent of volume and 18.6 percent of total value at a unit price of $834 per metric ton. Unit value during April 2019 rose 8.5 percent to $947 per m. ton compared with April 2018 and volume, up 1.3 percent contributed to an 8.0 percent increase in total value.

Taiwan was the 2nd ranked broiler meat importer receiving 87,277 metric tons representing 8.5 percent of volume and 7.3 percent of value with a unit price of $800 per ton. Taiwan reduced purchases by 8.1 percent over the first four months of 2019 compared to 2018.

Cuba continued as the 3rd ranked importer during Jan.-April 2019 with 6.7 percent of volume (68,659 metric tons) but 5.1 percent of value ($49.1 million) attributed to the product mix with a unit price of $715 per metric ton. 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.

Vietnam ranked 4th as an importing nation over the first four months of 2019. Volume attained 49,190 metric tons valued at $38.7 million with a unit price of $787 per metric ton. Volume and value during the period represented 4.8 percent and 4.0 percent of U.S. exports respectively during the period.

Angola returned to 5th place in Jan.-April after a decline during January and February 2019 combined. Imports attained 42,579 metric tons comprising 4.1 percent of U.S. broiler shipments. This nation decreased their import volume from the U.S. by 37 percent for the period in comparison with the first four months of 2018.

South Africa was the subject of considerable litigation and Congressional pressure in 2015 and in 2016. The nation ranked 10 th 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 10th for the first four months of 2019 importing 31,827 metric tons valued at $25.0 million, respectively lower by 7.6 percent and 19.3 percent compared to Jan.-April 2018. South African domestic producers continue to 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 2019 suggest that removal of U.S. duties on steel and aluminum have restored imports with South Africa ranked 10th for the month with volume attaining 7,087 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 four months of 2019 declined by 1.0 percent and value fell by 5.8 percent compared to Jan.-April 2018 due to unit value decreasing by 4.9 percent from $2,225 per metric ton to $2,116 per metric ton.

Mexico received 55.9 percent of turkey meat shipped during Jan.-April 2019 (51,218 m. tons) 21.8 percent less than in the corresponding period in 2018 (62,424 m. tons). Exports to Mexico represented 57.7 percent ($111.9 million) of the total value of $194.1 million exported.

South Africa ranked 3rd for Jan.-April 2019 importing 5,285 m. tons valued at $6.9 million or $1,305 per metric ton suggesting a low-cost product mix including MDM.

Collectively for 2018 the Caribbean (including the Dominican Republic) and Central America represented 8.1 percent of turkey meat exports and 7.0 percent of value.

CHICKEN PAWS AND FEET

Exports of chicken paws during the first four months of 2019 increased by 1.7 percent in volume compared to 2018 at 55,979 metric tons but with a 22.0 percent decline in total value. There was a sharp 23.2 percent decline in unit value to $1,246 per metric ton. Hong Kong imported 95.8 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 May 22nd USDA Cold Storage Report the stock level of Paws and Feet on April 30th 2019 increased by 7.5 percent to 27.3 million lbs. compared to April 30th 2018

 

PROSPECTS FOR 2019

The May 16th 2018 Livestock, Dairy and Poultry Outlook Report, projected broiler exports of 3.230 million metric tons in 2019 and 3,295 in 2020. The 2019 value represents16.5 percent of 19.54 metric tons of RTC to be produced by the U.S. industry.

Projected exports of turkey products in 2019 will amount to 278,000 metric tons, the same as in 2018 and representing 10.4 percent of 2019 production projected to be 2.673 million metric tons.

The Administration successfully renegotiated NAFTA into a new trilateral agreement termed the USMCA on September 30th. This agreement must be ratified by the legislatures of all three signatories. Recent action in removing tariffs on steel and aluminum and an agreement with Mexico regarding migrants should expedite adoption of the USMCA.

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 $397 million for the first four months of 2019.

Over the past 14 months approximately 450 diagnoses of END were recorded in backyard flocks comprising predominantly fighting cocks in southern California together with four cases in commercial egg production units. 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