Diplomatic relations with Mexico under new U.S. President Donald Trump will be very important to the U.S. poultry industry, as Mexico accounted for about 25 percent of all U.S. chicken leg quarter exports during the previous year.
Economist Paul Aho, Poultry Perspective, said while speaking at the 2017 International Production & Processing Expo (IPPE), that 33 percent of the large chicken leg quarters produced in the U.S. are consumed domestically, which means that the remaining 67 percent need to be exported.
The U.S. broiler industry experienced a tough 2015 that resulted in what many would consider as an oversupply of leg quarters. The U.S. poultry sector was plagued by a trade restrictions brought on by avian influenza, the rising value of the dollar, a weak world economy and a particularly weak economic situation for big chicken importing countries that are also big oil exporting countries.
Things improved in 2016, with most trade restrictions being lifted and a rise in oil prices to help certain countries be able to import more chicken.
But how will 2017 be for U.S. poultry exports? Aho anticipates that some of 2016’s strengths will carry over, but there is one thing that makes him cautious.
“The big unknown is Mexico. How are our trade relations going to be with Mexico? That’s a very good question,” Aho said.
“Mexico is the No. 1 buyer of U.S. large leg quarters. They bought more than a billion pounds last year. They’re very good customers. You want to treat customers like that very carefully. They bought 25 percent of all our chicken leg quarter exports.”
U.S. also needs good relations with Cuba
Aho also stressed the importance of Cuba as a trade partner. It ranks second in terms of importing chicken leg quarters, having last year purchased 330 million pounds.
“I don’t think we can assume that relations with Mexico and Cuba are going to be great this year,” he said. “Hopefully, calmer heads will prevail and we will continue to have good relations with those two countries.”