For the first time ever, the American Egg Board (AEB) is working to increase the consumption of U.S. eggs outside of the country.
In 2017, the AEB – a checkoff-supported organization charged with increasing demand for eggs and egg products through research, education and promotion – is making increasing exports a strategic priority. In an interview with Egg Industry, the AEB’s President and CEO, Anne Alonzo, and its immediate past chairman, Blair Van Zetten, explained the reasoning behind the decision and how the organization will help the U.S. egg industry increase its business abroad.
“We’re very excited and I think that this is exactly where we need to be as an organization in terms of supporting our producers and their interests and increasing demand,” Alonzo said. “This is a natural evolution, we believe, for this organization.”
Anne Alonzo
The vision of a new mission
Van Zetten, president of the Oskaloosa, Iowa-based Oskaloosa Food Products Corp., an egg products company, said the egg industry has a simple mathematical reason to export.
Blair Van Zetten
While the U.S. is the world’s second largest egg producer, with U.S. hens laying 5.7 million tons of eggs in 2015, only a small percentage of the world’s population lives within the country. Meanwhile, it exports only 3.5 percent of its eggs, Van Zetten said. By comparison, more than 20 percent of U.S. broiler meat is exported.
U.S. egg exports used to be more robust, at about 7 percent, Van Zetten said. But the 2014-15 highly pathogenic avian influenza (HPAI) outbreak and its fallout shrank the egg export market by half.
“We want to regain that 3.5 percent and we want that market to grow. In our business, we always look for sustainability, so we don’t want to be a player today and gone tomorrow,” Van Zetten said. “Our goal is to develop exports, and sustain that business and grow that business.”
Alonzo agreed, saying the AEB’s board identified export markets as a potential area for strong growth in the future and wanted to prioritize it for 2017. The AEB isn’t just jumping into the fray this year, either. She said the organization is working with the USA Poultry & Egg Export Council (USAPEEC) – a nonprofit organization promoting the U.S. poultry industry around the world – on the initiative. Together, the two organizations arranged trade missions to Mexico and Cuba in 2016, and have several events planned for 2017.
The groups signed a formal memorandum of understanding cementing their partnership, Alonzo said. The AEB’s CEO is also serving on the USAPEEC board, a first for both organizations. USAPEEC’s 14 international offices, years of institutional knowledge and experience as well as its robust trade infrastructure make it an ideal partner in the AEB’s mission, Alonzo said.
The strategy
According to a survey of the egg industry and its analysis, the AEB sees the best potential in two types of markets: countries where U.S. eggs are already exported that have industries with the potential to consume more eggs, and countries that do not import U.S. eggs but have the right characteristics to be a significant purchaser of eggs and egg products.
The countries and markets that best fit the bill right now are Hong Kong, Japan, Mexico, South Korea, the Middle East and the Caribbean. Alonzo said the AEB plans on attending trade shows in those countries and regions and hosting representatives on reverse trade missions as well. For now, Alonzo said, the AEB is focused on getting started rather than setting a goal for export volume growth.
A major priority is setting up direct contact between U.S. egg producers and their potential customers abroad. Van Zetten said the U.S. egg industry is already export ready, but it needs to understand and meet the requirements foreign countries place on egg imports in order to open doors.
The industry already scored a major victory on the export front in early 2017 in South Korea. The Asian nation is experiencing its worst-ever outbreak of avian influenza, which created a shortage of eggs and rising food prices. After working with the U.S. Department of Agriculture and its counterparts in Korea, the market opened to U.S. egg exports for the first time ever.
More than 14 million eggs were shipped to the country in January alone. Van Zetten and Alonzo said they hope the temporary opportunity turns South Korea into a reliable export market. A major meeting of U.S. egg producers and Korean food companies was planned for late March in Seoul in order to create stronger business ties between producers and buyers. The South Korean example shows how HPAI can be an opportunity for U.S. producers to enter a market.
An unforeseen outbreak of HPAI in Lincoln County, Tennessee, in early March led Korea to halt imports of U.S. poultry and shell eggs. Heat-treated chicken meat and egg products can still be imported. In the days after the HPAI outbreak at a broiler breeder farm in Lincoln County, as many as three more cases were suspected in the state and neighboring Alabama.
Potential challenges
The Tennessee outbreak, and the pervasiveness of avian influenza around the world, represents a global challenge for the poultry industry. Van Zetten and Alonzo said they do not think the disease will stop export growth. The U.S. egg industry’s commitment to biosecurity in light of the devastating losses of the 2014-15 outbreak has made the country an international leader in biosecurity, Alonzo said.
“I think we’re so far advanced over the rest of the world right now in how to handle (avian influenza), just because of our losses and what we’ve done with the strict biosecurity that we’ve put in place to try to minimize everything we possibly can. AI is here to stay. It’s all over the world,” Van Zetten said. “It’s not like anybody can point fingers at one source or another.”
Several countries, including Hong Kong, Japan, Mexico and South Korea, have established bans of U.S. poultry due to the outbreak. Most of the restrictions are limited to the state or county where the outbreak began, following the regionalization approach USAPEEC advocates.
U.S. President Donald Trump, who quickly withdrew the U.S. from the Trans-Pacific Partnership trade pact after assuming office, brings tough talk on international trade with him to Washington, including open hostility against Mexico. Van Zetten said AEB is not focused on politics, but a shakeup on trade could be an opportunity.
