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Broilers & Layers / Business & Markets
on December 30, 2016

Antibiotic-free poultry’s broader economic implications

The higher costs associated with antibiotic-free poultry production in the US have implications beyond the country’s producers.

The trend toward antibiotic-free poultry production is likely to have some unexpected and far-reaching consequences.

Read the entire report about antibiotic-free poultry exclusively in the January issue of Poultry International.

The U.S. poultry industry is poised to set production records heading into 2017 due to continuing increases in head counts and bird weights. Consumer demand for specialty protein is also a driver of this volume expansion, as it has become a significant factor in the types of birds being marketed.

This shift, with a particular emphasis on antibiotic-free (ABF) chicken, has been particularly amplified in 2016, as several fast-food chains have announced their intent to phase out the use of conventional chicken in favor of ABF meat over the coming years.

To understand the implications for these rapid developments, it’s critical to examine the drivers of the industry’s sharp growth trajectory. 

This evolution in the chicken industry will raise the cost of production for U.S. processors, through increased mortality and a likely decline in weight gain efficiencies. These added costs, in some form, will eventually be passed along to consumers as all levels of the supply chain seek to protect or enhance margins. 

The other side effect will likely be absorbed by processors themselves. The U.S. chicken industry exports nearly 20 percent of its annual production, predominantly to developing economies, where demand for protein is rising. In many ways, the export market for chicken has buoyed the U.S. industry through very difficult cycles, so it is an important distribution channel that cannot be ignored.

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