Today, U.S. poultry exports are at 3 million metric tons, but I predict the level of exports will grow to 5 million metric tons by 2035. How will the industry accomplish this growth? By listening. Yes, that’s the industry’s simple, but proven, formula for success.
The chief architect of this formula for 25 years has been the U.S. Poultry and Egg Export Council (USAPEEC), which was organized in 1985 to replace its predecessor organization, the Poultry and Egg Institute of America, which had fallen on hard times. USAPEEC struggled at first with just a few poultry and trading company members. However, since 1990, under the leadership of Jim Sumner, USAPEEC grew to become a powerful and innovative organization with over 200 members.
The organization blossomed as the export market for poultry expanded exponentially in the last 25 years. Chicken exports in 1985 were only 176,000 metric tons of mostly whole chickens sent to a handful of countries in the Middle East. This year, chicken and turkey exports will be 3,000,000 metric tons of chicken and turkey meat. Looking forward to the next 25 years, 5 million tons can be expected to be exported by the U.S. in the year 2035.
First steps in Russia
The explosive increase in exports over the last 25 years was fueled by the transformation of the U.S. poultry industry from an industry dominated by unbranded whole and cut-up parts to one dominated by deboned breast and in particular, deboned chicken breast. The number of chickens deboned for breast meat increased from fewer than 500 million in 1985 to more than 4 billion in 2010. The inevitable result of more deboned breast meat output was more leg quarters. Production of leg quarters increased from less than 1 billion pounds to more than 10 billion during this time. This provided the raw material for exports of a competitively priced product providing export markets could be developed.
The biggest market for leg quarters developed over the last 25 years has been the Soviet Union and then Russia. Nevertheless, numerous other destinations have been carefully cultivated over the years. As a result, when trade problems erupted this year with Russia total chicken exports continued relatively unscathed. Although USAPEEC continues to work tirelessly to maintain the Russia market, numerous other destinations help to take the place of Russia when there are problems in that market. The story of how markets are developed and sustained is the story of USAPEEC.
Thinking outside the box (really)
Everyone talks about thinking outside of the box, but very few organizations can point to concrete examples. USAPEEC is an organization that really does think outside of the box. It has been effective by taking actions that appear to be counterproductive – even outrageous – at first glance but turn out to produce positive results. The first reaction about many USAPEEC initiatives is, “Can they really do that?”
For example, who would have thought that setting up a chicken production company in Russia would help to sell U.S. chicken meat in Russia? USAPEEC started a joint venture to produce broilers in Russia as a good faith gesture that improved the political climate in Russia for U.S. chicken.
Counterintuitive initiative in Mexico
Another initiative was to increase the tariff on U.S. chicken meat in Mexico from what it otherwise would have been. When the tariff on leg quarters was due to go to zero on January 1, 2004, USAPEEC worked with the Mexican Poultry industry, the U.S. government and the Mexican Government to leave the import duty on leg quarters in place for an extra five years while letting all other poultry and egg products enter duty free. The arrangement resulted in better relations between the U.S. and Mexican poultry industries and ultimately more exports. Leg quarters now enter Mexico duty-free.
Would helping small chicken farmers in Vietnam increase U.S. exports to Vietnam? Yes, it did. USAPEEC organized the donation of chicken to Vietnam to be sold to help small famers decimated by H5N1 bird flu virus. Would administering chicken leg quota to Central America and distributing the quota auction proceeds to Central American poultry organizations help U.S. exports to Central America? Yes it did. In every case, the long term result was increased U.S. exports.
If there is a central theme in the USAPEEC model, it is the development of strategic relationships with counterpart poultry and egg organizations in other countries. As Jim Sumner says, “I think this is best accomplished by listening to their concerns. This approach has helped us tremendously, whether it’s Mexico, China, Vietnam or Central America.”
The development of those relationships requires, at a minimum, effective communications and USAPEEC is particularly good at listening. At the bottom of every e-mail sent from Toby Moore of USAPEEC is the valuable reminder, “All problems are communication problems.”