In a time of great economic change, the U.S. poultry industry is evolving in terms of how it competes on a global basis and how those dimensions of competition will change in the future. A panel of experts discussed this and related topics during a roundtable discussion in Atlanta in January. The panelists found consensus in the idea that the U.S. has been and will continue to be a dominating force in the global poultry industry, and its future success depends largely upon its ability to adapt to the changing landscape of the industry worldwide. 

Panelists at the roundtable discussion were: Dr. Paul Aho, economist and industry consultant; Steve Anderson, president, Lamex Foods, food/poultry trading company; Gordon Butland, G&S Agri Consultants; Dr. Steven Clark, senior technical services manager, Pfizer Animal Health; Dr. Lloyd Keck, senior technical services veterinarian, Pfizer Animal Health; Jim Sumner, president, USA Poultry & Egg Export Council; and William Roenigk, senior vice president, National Chicken Council. The event was sponsored by sponsored by Pfizer Animal Health Global Poultry. Gary Thornton, editor of WATT PoultryUSA, moderated the roundtable.

The panel expressed enthusiasm in moving forward with new opportunities for the industry and offered ideas and solutions for overcoming the significant challenges the industry also faces. 

A solid starting point  

In terms of production, or input, costs, the U.S. is in a strong position given factors such as land, capital, infrastructure, technology and grains. Labor continues to be a factor where competitiveness is somewhat compromised, given it is domestically cheap and simultaneously expensive compared to other markets.

“The labor in the U.S. is both too expensive and too cheap at the same time,” said Aho, explaining that U.S. labor for the poultry industry is nearly five times more expensive than in Thailand, but is cheap enough that the industry has a high turnover rate.

While this does pose a challenge, Butland argued that this factor is somewhat leveled given similar issues in Brazil and Thailand, in terms of high levels of absenteeism and turnover and a limited workforce. “Nobody wants to work in this industry all over the world,” he said.

Challenges and room for improvement  

Even with a strong outlook in terms of production costs, the U.S. poultry industry certainly faces challenges for competition, both on the domestic and international front. 

The U.S. historically has been a strong player in the arena of technology and innovation, but implementing and acquiring government approval is a difficult and lengthy process. Several panelists called for improvements to the regulatory process, coupled with a concerted industry effort to educate consumers about the benefits of these advancements. 

“Will our government allow us to use our technological advances?” asked Roenigk. This is being called into question amid an increasingly complex regulatory environment, particularly in the areas of animal welfare, genetics and disease prevention. 

“The regulatory environment has made it more difficult to bring new products to market,” said Keck, and the willingness of the government to work with the industry is crucial to ensuring new technology and innovation become more than just prototypes. 

Regulatory challenges are not limited to the domestic market, reaching the export market, as well. “The only reason we’re not able to compete with a Thailand or a Brazil isn’t anything to do with our quality, it’s politics. We can’t get into Europe … if we could, we’d be able to compete,” said Anderson.

Since the 1997 EU ban on U.S. poultry imports, Lamex has tried to get attention from the U.S. government to regain its foothold there but has not made much ground. “We’d like to get into the EU [by complying with its guidelines] … but our government says, and maybe rightly so, ‘we don’t know where your poultry’s going, it needs to be safe for everybody, so we’re not going down that road.’ But we don’t have that option,” said Roenigk. This government stance poses a significant competitive disadvantage for the U.S. poultry industry. 

The panelists also expressed concern that politics outside the industry are invariably having an effect on the industry itself, citing in particular trade challenges involving China and Russia.

“Our [the U.S.] poultry industry for some reason becomes a political pawn for countries that have problems with other U.S. issues,” said Sumner, in reference to allegations of dumping. The U.S. Department of Commerce is making allegations of dumping to certain countries and these countries are responding with similar accusations on other commodities, a quid pro quo mentality that’s bound to setup the U.S. for failure in resolving trade issues. 

A commitment to resolving these issues requires an understanding of the importance of agricultural exports. Keck stressed the need for the U.S. government to recognize the level of this importance by moving forcefully and faster toward resolution in these disputes.

Whether domestic or international, industry challenges that necessitate the involvement of the U.S. government require political clout – something that can be hard to come by. “It’s all about political clout. Does the U.S. poultry industry have the political clout that it needs to put ourselves on the agenda, and who are we up against?” said Sumner.


A single industry gaining this clout is therefore difficult, which is perhaps why the industry made some traction in ethanol reform. “It depends on what kind of coalition you can cobble together, whether or not you’re going to have political clout” on each individual issue, Roenigk said. For example, the coalition pushing for ethanol reform was stronger than other industry issues, as there were more people at the table.

Pushing to gather this political clout is vital, as it’s necessary to get various industry issues on the administration’s agenda, and if it’s not on the agenda, it won’t be addressed. Anderson said the industry would do well to come together annually to contribute to the National Chicken Council political action committee, to develop the clout needed to pursue these issues.

Strengths and opportunities  

Yet, “There have been some positive accomplishments,” Sumner said, in regards to politics. He said, for instance, the USA Poultry & Egg Export Council is pleased with the way the government accepted their request on China with the recent World Trade Organization case. 

The existence and success of the USA Poultry & Egg Export Council is, in and of itself, a unique competitive advantage, said Butland. While Brazil may one day have a similar association with UBABEF, the U.S. is the only country that currently has an association advocating for poultry and egg exports. Thailand, for example, has seen great strides in poultry production through large companies such as Saha Farms and Charoen Pokphand Foods, but a company alone does not facilitate trade.

Other competitive advantages identified by panelists included disease prevention and control. “That’s the one area where I think our government shines above all others,” said Sumner, referring to the government working with the industry to keep the U.S. poultry supply disease free, which Sumner said was critical for continued competition. Disease prevention and control is still a big threat in Asia, which has not progressed markedly in this area over the past 10 years. “That’s certainly going to keep the U.S. and Brazil at the top of the heap as far as major poultry exporters from this point forward,” he said.

Keck agreed on this point, saying the U.S. is second to none in this area and calling for “good science [and] good sense” to drive our decisions when it comes to disease prevention and control.

Continued consolidation  

The poultry industry has seen significant consolidation in recent years, a trend predicted to continue in the future, as companies consolidate not only domestically, but multi-nationally. 

“We may get to the point where 80 percent of the chicken is produced by three or four companies [in the U.S.] … and there will be room for another few dozen companies that take over the other 20 percent of the market,” said Aho.

Aho also noted that some of these companies will be foreign owned. Will this trend toward globalization be a negative factor? Not necessarily, but it does come with unique challenges, such as maintaining consistent business practices from region to region. The values a company represents are not as easy to monitor with global expansion. It also poses a new dimension for Sumner and USA Poultry Egg & Export Council as they navigate through promoting the interests of U.S. poultry exporters with U.S. companies that have footholds the world over. But global ownership certainly does offer, said Sumner, a way for more companies and industries to come together.

Although the industry is seeing this consolidation take place, it’s not yet clear whether this tactic offers a profitable business model. “From a bottom line point of view, the jury’s still out [on whether it’s an advantage] because some of those big guys, they’re in many countries, but they’re not very profitable at the moment,” Butland said. More time is needed to know whether consolidation is a profitable model for the industry.

Remaining competitive in the future  

The U.S. broiler industry has become much closer to accepting international trade, said Sumner. Bringing exports to market (as opposed to domestic-use products) offers a unique set of challenges and adds another level of complexity, but the industry has risen to this challenge. It also is diligently working to resolve trade issues, given the necessity of keeping markets open to trade. “Our industry cannot go forward thinking that we’re going to write off China like we wrote off the European Union,” he said in relation to the trade issues with China. “That would be the worst thing we could possibly do.”

The growing population also means more mouths to feed, and an increase in consumption is certainly an opportunity, as well. Keck advocated for a forward-thinking outlook, recognizing the importance of agriculture to the U.S., continued development in technology and an emphasis on pushing the political agenda to address the needs of the industry. Additional countries are developing their own industries and exporting their products, which makes it even more important that the U.S. keep working to open trade with additional markets and pay close attention to what those markets may need.

Listening and responding to consumer demands both domestically and internationally will be crucial, as well. “We’ve got to see that the marketplace is changing. We’ve basically produced a low-cost item. We sold dark-meat leg quarters that were viewed as somewhat of a byproduct , and that market has changed dramatically; it’s no longer there. So we have to look at what’s being asked for in some of these other places, and I think we have to be responsive … to meet those market demands,” said Keck.

A continued focus on innovation is also key in this area, said Clark. For example, demand for voluntary certifications (for animal welfare, size, etc.) is increasing, and offers access to premium market value. “… all of these things are being driven by the marketplace,” said Clark, making it important for companies to hear these demands.

With an understanding of where it can improve, where its strengths are and where it can go, the U.S. poultry industry is poised to remain, and even increase its competitiveness. “Moving forward, this whole topic of competitiveness is going to be very critical – it always has been – but in terms of who's going to survive and who's going to move on, five years, 10 years from now, it really is important the important [topic]. How do you compete, not just within the industry, but outside the industry, too,” said Roenigk.