U.S. exports of poultry meat are more diversified by customer market than a few years ago, but the industry’s exports are still perilously dependent on certain key customer markets. This has industry leaders studying the strategy options.

Speaking at the USA Poultry & Egg Export Council winter meeting, Jim Sumner outlined the trade situation for members: Three markets dominate U.S. poultry exports – Russia, China and North America. These destinations accounted for 59% of 2009 exports. Eight more markets – Cuba, Ukraine, Iraq, Taiwan, Lithuania, Georgia and Guatemala – accounted for 17% of exports. All other markets accounted for only 24% of trade.

USAPEEC is working on plans to further diversify profitable, sustainable and customer-focused U.S. poultry exports.

Projected growth  

Global markets, and not the domestic market, are expected to be the key to future growth for U.S. poultry industry. At the meeting, Robert Ludwig and Kent Sisson of The Hale Group and SIAM Professionals LLC addressed this reality and talked about trends and strategies for tapping the expected growth in world consumption.

Projections cited by Ludwig for 2009 through 2019 call for very modest growth in U.S. per capita consumption of poultry products, with consumption of chicken up 10.2% for the 10-year period or compounded growth of only 1.0%. The projection for turkey per capita consumption in this period is zero.

Will U.S. exporters tap growth in world demand?  

With domestic poultry consumption projected to be flat, will U.S. exporters be able to capture their fair share of world growth? Without changes in business strategy, they may not, according to analysis by Ludwig and Sisson.

USDA’s baseline projections for the decade, through 2019, show poultry meat exports by Brazil growing by 40%, for example, and U.S. poultry meat exports growing by only 1.6%. They also cited USDA’s anemic projection for U.S. poultry meat exports with its projections for Thailand + 58.4% and China +66.0%.


Ludwig postulated the following scenario: Assuming USDA projections become reality, the U.S. share of global trade in chicken and turkey meat would fall from 35% in 2010 to around 30% in 2019. At the same time, Brazil’s share of that global trade would rise from 38% to around 42%.

“Is the U.S. poultry industry willing to allow Brazil to capture 42% of global trade in 2019 while the U.S. share declines to 30%?” he asked.

While USDA’s baseline projections are not designed to predict the future, Ludwig and Sisson used them to help frame what’s at stake for the U.S. poultry industry. It’s a lot.

Future strategy  

Numerous opportunities and threats are being weighed in the strategic review. Opportunities include global population growth and a rapidly rising middle class in China, India and parts of the Middle East. But these opportunities come with their challenges, such as lack of access to Chinese markets and the Obama administration’s lack of focus on market access issues and free trade agreements.

Similarly, a potential opportunity exists in moving international customers up the value chain in poultry products, but there is an associated challenge rising feed costs, which could push the cost of poultry out of reach for consumers in many developing economies. At the same time, U.S. poultry producers must deal with labor costs that are higher than those of competitors, including Brazil.

A lot is at stake. World trade and exports have been an extremely important factor in the U.S. poultry industry’s success over the past two decades and their importance is even more critical for the future.