The U.S.’s two largest North American trading partners – Canada and Mexico – often feel overlooked but they are reliable and important foreign destinations for U.S. broiler meat.
Quantifying the importance to trade
In 2019, slightly more than one-quarter of the roughly 7.1 billion pounds of broiler meat shipped from the U.S. to all foreign destinations went to either Canada or Mexico, according to U.S. Department of Agriculture-Economic Research Service (USDA ERS) estimates. Over the past five years, exports to Mexico totaled nearly 7.2 billion pounds and shipments to Canada totaled nearly 1.7 billion pounds.
New uncertainty
The U.S. broiler industry has grown its reach into both Canada and Mexico for the better part of a quarter-century. Trade peaked in 2014, when total combined shipments reached 1.9 billion pounds, representing 4.9% of total domestic output that year.
A setback followed as the industry battled through trade restrictions imposed in response to the outbreak of highly pathogenic avian influenza (HPAI). Exports to Canada and Mexico declined further in 2017 as the Trump administration introduced antagonistic policies toward the countries. That year, combined U.S. broiler meat shipments to Canada and Mexico failed to reach 1.7 billion pounds, or just under 4.0% of total domestic output.
The combined share of U.S. broiler production exported to Canada and Mexico is down in recent years from its 2014 peak but remains significant at more than 4%.
Broiler meat exports to Canada and Mexico have rebounded slightly the past couple of years but remain short of prior peak levels. This rebound was driven exclusively by Mexico as exports to Canada declined steadily since 2015.
A new path forward
It’s easy to get fixated on China and other potential wild cards that might shake up the trade dynamic and deliver huge export gains on a relatively short timeline. However, it looks like the safer bet is prioritizing positive relations with historically reliable and geographically close trade partners.
While the Trump Administration extols the virtues of the U.S. Mexico-Canada Agreement (USMCA), which appears headed for eventual implementation, it’s unlikely to be revolutionary. It’s seen as more of an amending and rebranding of the North American Free Trade Agreement but should at least be an important step in the process of restoring positive relations.
Industry stakeholders laud the deal and see it bolstering access to the Canadian market. U.S. chicken companies trying to unload a surplus of boneless skinless breast meat – consistently selling for less than $1 per pound wholesale since September 2019 and sitting at record levels in cold storage – certainly welcome that opportunity.
