Chicken consumption will reach at least 100 pounds per person by the year 2022, Bill Roenigk predicted when he addressed the marketing and sales managers gathered at the Chicken Marketing Seminar 2015. The U.S. Department of Agriculture (USDA) estimates chicken consumption at 90 pounds on a retail weight basis in 2015. Roenigk, previously senior vice president and chief economist for the National Chicken Council, explained he has a high level of confidence that consumers will eat an additional 10 pounds of chicken over the next few years so that the century-mark in per capita chicken consumption can be achieved by 2022, if not before then.
By 2022 chicken consumption will reach at least 100 pounds per person on average compared with an estimated 90 pounds in 2015.
Certain “events” could knock the upward trend in consumption off-track, Roenigk said. The risk of these events significantly impacting consumption is minimal but not zero, he allowed. Avian influenza may be the top-of-mind event at present, but a severe shortfall in the corn/soybean crops between now and 2022 could send feed costs and, therefore, chicken production costs/prices to levels that turn-down consumer consumption.
Processing line speeds of 175 birds per minute
On the other hand, government regulations could have a positive effect. Roenigk believes, for example, USDA will most likely revisit the line-speed inspection issue that the agency halted for chicken in 2014. Well before 2022, he believes the agency will, in fact, give the industry the green light to ramp-up inspection line-speeds from the current 140 birds per minute to 175 birds per minute. This more efficient and productive flow of product through first-state processing will result in not only measurable in-plant cost savings but also a higher-quality carcass since USDA is tying the higher line-speeds to more stringent and consistent food safety requirements.
Demand for chicken up more than pork, beef
Roenigk noted that consumer demand for chicken has been strong over past years. Demand for chicken which takes into account pounds consumed and prices paid is up more than 7 percent from 1998 compared with 1 percent for pork and 13 percent for beef. While the price of chicken and consumer incomes might explain, from a statistical relationship standpoint, over 90 percent of the change in chicken consumption, the remaining 10 percent is one of the primary reasons marketing seminars are critically important, the speaker noted. New products, innovations in packaging and improved cold-chain distribution are just three ways the consumption needle can be moved upward in a meaningful way.
Chicken competes every day and in every market place with not just beef, pork and other meat/poultry but also non-meat proteins. As the consumption level of chicken increases the fatigue factor and competition from other proteins will undoubtedly become more important issues that will need to be adroitly and successfully addressed by chicken marketers.
More big birds
As the marketing mix continues to move toward more and more further-processed/prepared chicken products, the need for large breast meat portions will increase. This year, more than one in five chickens are “big birds” (7.75 pounds, liveweight, and heavier), according to USDA’s Agricultural Marketing Service.
USDA/AMS measures birds in four chicken weight categories.
The share of big birds today is more than triple the share in 2005. Almost 20 percent of chickens were produced in the heaviest category in 2014 and these birds contributed close to 30 percent of the pounds processed. Not only are the bigger chickens produced/processed at a lower cost per pound compared with smaller birds, the larger boneless/skinless breast meat is measurably more efficient during second-stage processing to convert into the many convenient products, such as nuggets, strips, patties, sized portions and similar products.
At the same time, Roenigk foresees boneless/skinless thigh meat becoming more main stream in the years ahead. It is not just Hispanic and Asian consumers who are enjoying the tastiest part of the chicken.
100 pounds per capita chicken consumption by 2022?
Roenigk concluded that, from his experience, it is always wise to be cautious when the indicators tend to all point toward a certain outcome. He added that the long-term momentum of the upward trends in chicken consumption and demand are powerful forces. Rising consumption is like a bicycle rolling forward: It is much easier to balance supply and demand when moving ahead than when the bicycle is stationery.
Achieving the milestone of 100 pounds of chicken consumption will require the industry to continue to be dynamic and, at the same time, it will provide a point-in-time and an opportunity to look forward to what comes after that achievement.
Roenigk’s presentation from the Chicken Marketing Seminar 2015 can be viewed and downloaded at: https://goo.gl/lpmHr0.
More big chickens on the way
By 2022, chicken consumption will reach at least 100 pounds per person on average compared with an estimated 90 pounds in 2015. The average annual rate of increase in consumption from 1970 through estimated 2015 is 1.9 percent. Between 2006 and 2013, the Renewable Fuel Standard that mandated increasing quantities of ethanol distilled from corn negatively impacted chicken consumption as the Renewable Fuel Standard drove feed costs higher and eventually chicken prices followed, dampening chicken consumption.
Big birds (7.76 pounds, liveweight, and heavier) have more than tripled their share of total chickens produced and pounds processed. The trend toward bigger birds continues in 2015 with over 13 percent more birds in the heaviest category when compared with 2014. The heaviest category could account for over 30 percent of total chickens by 2022, Roenigk predicts.
Chicken weight categories
USDA/AMS describes the four chicken weight categories as follows (all pounds are liveweight):
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4.25 pounds and under – normally marketed bone-in into fastfood/foodservice sectors; may include Cornish hens
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4.26 pounds to 6.25 pounds – normally marketed into retail grocery sector in tray-pack or bagged forms
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6.26 pounds to 7.75 pounds – normally marketed either into retail grocery sector in tray-pack and quick-frozen form or further processed and marketed into various sectors
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7.76 pounds & heavier – normally marketed deboned or as roasters/roasting chickens
