There are signs that the U.S. poultry industry is moving off a Russia-centric model for the marketing of chicken leg quarters. Good for the U.S. industry!
As the Russian ban on U.S. poultry ground on for the first seven months of 2010, U.S. processors sought and found new international markets for chicken leg quarters, and increased the production of deboned dark meat, much of which is being marketed domestically.
U.S. surprise
Prices for leg quarters, as a result, held up surprisingly well during the trade stoppage, and better than expected by many producers and traders. After all, the market’s history is much different than what’s been experienced in the past seven months. Markets for dark meat have been whipsawed by Russian politics for almost two decades, as the Russian government repeatedly engineered trade disruptions.
Trade in chicken leg quarters, nonetheless, has been good for both the Americans and the Russians. Russia needs the nutritious, economical product to feed its people. It still can’t produce enough poultry for its needs.
That said, U.S. producers probably surprised the Russians by agreeing to their demands that chlorine-based pathogen reduction treatments be eliminated in poultry exported to Russia.
New pathogen reduction treatments
The U.S. poultry industry is preparing to meet the new Russian requirement with the use of three Russian-approved pathogen reduction treatments: cetylpyridinium chloride, hydrogen peroxide and peroxyacetic acid. U.S. poultry companies, in fact, should soon be able to export product to Russia treated with the alternative treatments.
Other provisions in the agreement are expected to include the following:
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U.S. plants will specify the pathogen reduction treatments used during processing on a new, additional certificate.
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Municipal water can be used in processing, provided no additional chlorine is added at the plant.
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Chlorine can be used for equipment cleaning and sanitation, provided it does not come in contact with the poultry carcasses.
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Plants must make a new application for certification to export to Russia.
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Russia is expected to request joint plant audits with FSIS, possibly as early as this fall.
U.S. producers looking to new markets
Now, as Russia continues to mount a drive for self-sufficiency in poultry production, don’t expect this latest “resolution” to be the fix that lasts. In fact, there are indications that an important number of U.S. producers are no longer willing to have their profitability hostage to Russian politics. They are seeking and finding new markets for chicken leg quarters, and they are adding value by deboning more dark meat (see “Second-processing tackles labor and yield” at www.WATTAgNet.com/16914.html).
Seeking favorable imbalance
Here’s the position that U.S. poultry producers should be seeking in their trading relationship with Russia – to be less reliant on Russia as an export market for chicken leg quarters than Russia is on poultry imports to supply its needs. This calls for continuing development of new, alternative dark-meat products and markets.
As Russia moves toward self-sufficiency in poultry production, that’s the favorable side of the trading relationship with Russia. It’s also the position from which U.S. producers can expect to sell more poultry, on better terms, to the Russians in the long run.
