By David B. Strickland
Poultry Times editor
WASHINGTON — Exports had quite an impact on the poultry industry in 2020, stemming from increases in demand and trade, as well as the COVID-19 pandemic.
Two major markets, Mexico and China, were notable regarding the broiler, egg and turkey segments, the USDA’s Economic Research Service states in its recent “Livestock, Dairy and Poultry Outlook” report.
A strong demand from Mexico increased the volume of egg and egg products from the U.S. last year by 3 percent, ERS notes. However, weaker demand for turkey caused a 10.5 percent decrease for the protein. For broilers, a strong demand from China helped support a 3.8 percent increase last year. But there was a decrease of 5.1 percent overall in value as the chicken industry adjusted prices because of COVID-19.
“Recent broiler hatchery data suggests that there will be a smaller-than-expected year-over-year decrease in birds available for marketing in the coming months,” ERS said.
Broiler production for the first quarter of 2021 is estimated at 11.05 billion pounds.
ERS adds that, “Higher feed costs are expected to dampen producer margins and thus production growth in the second half (of 2021) … production in 2021 is forecast to total 44.88 billion (pounds), less than a 1 percent increase over 2020 production.”
The export volume for broilers in December was reported at 611.6 million pounds, which is approximately a 4.1 percent increase from the previous year.
In 2020 “broiler exports totaled 7.37 billion pounds, an increase of 3.8 percent,” the report says. “Shipments to China increased by 682 million pounds relative to 2019, which significantly offset lower shipments to several key markets that were impacted by the global economic slowdown. The increase in Chinese demand is due to the opening of the Chinese market to U.S. poultry products in November 2019, as well as the protein deficit in China caused by African Swine fever.
“This surge in exports pushed China to become the second-largest foreign market for U.S. broilers after Mexico, which has long been the largest. In 2021, it is expected that China will continue to import broiler products from the United States; however, the extent will largely depend on the rate at which China’s swine industry recovers.”
Larger broiler shipments were also noted to Taiwan (up 76 million pounds), and Mexico (up 37 million pounds). These increases were offset by decreased shipments to Hong Kong (131 million pounds less), Angola (111 million pounds less), and Cuba (109 million pounds less).
In value, broiler exports totaled $3 billion last year, which is a decrease of 5.1 percent from 2019.
“This decrease can be largely attributed to lower valued broiler products, as indicated in the 8.6 percent decrease in average dollar value per pound of product,” the report noted.
“This decrease in value per unit is likely a reflection of depressed domestic prices caused by COVID-19-related market disruptions both domestically and globally,” ERS added.
Broiler prices, wholesale, were 82.3 cents per pound on average in January of this year. This is a reduction of 9.1 percent from 2020.
“For the outlying quarters, demand is expected to improve but will largely be tied to the recovery of the foodservice industry; however, broiler meat demand is expected to benefit from the quick service restaurant (QSR) sector and the ongoing chicken sandwich wars,” USDA said.
The average broiler price for 2021 is being estimated at 84.5 cents per pound, up 15.4 percent compared to last year.
The production of table eggs in December was reported by the USDA at 695 million dozen, which is 3.1 percent less than the previous year. Average egg layer flocks were 4.7 percent less than last year, but the lay rate was increased by 1.4 percent. The production of table eggs in 2020 was approximately 8 billion dozen, which was similar to 2018 reported numbers.
“For much if not all of 2021, it is expected that the layer flock will remain below pre-COVID-19 levels as the industry, particularly the egg breaking sector, continues to recover,” ERS notes. “In addition, higher expected feed costs are likely to dampen production expectations further, which was the basis for lowering the 2021 table egg production forecast to (8.1 billion dozen), about 1 percent higher year-over-year, but still about 1.7 percent below 2019 production.”
The production of hatching eggs for 2021 is being estimated at 1.2 billion dozen.
For exports of eggs and egg products, 32.7 million dozen were reported for December, a 10.6 percent increase from 2019.
“For 2020 as a whole, export volumes totaled 344 million dozen, up 3.1 percent relative to 2019,” ERS said. “This increase is in large part due to increased demand from Mexico, to which shipments increased by more than 21 million dozen year-over-year, leading Mexico to surpass Canada as the top export destination for U.S. eggs and egg products. The increase in shipments to Mexico can be attributed to an increase in demand for table eggs, as well as whole egg products. Meanwhile shipments to Canada decreased by more than 18 million dozen relative to 2019, driven by lower demand for table eggs.”
The value of egg exports saw a decrease of 1.9 percent, despite the increased amount volumes, USDA said.
“This decline can be attributed to a 4.8 percent decrease in the average value per unit, which was weighed down by egg product values — likely a function of weak domestic demand for egg products due to a decrease in demand from the hospitality, institutional and restaurant (HRI) sector,” ERS added.
Egg price in January (wholesale, Grade A large) were, on average, $1.09 in January. This is an increase of 24 percent compared to the previous year.
“In January, prices climbed from 93 cents per dozen to $1.40 at the end of the month, where they remained for the first week of February,” USDA reports. “Prices have since been gradually declining, consistent with seasonal patterns.”
The forecasted egg price average for 2021 is $1.11 per dozen, which is down slightly from last year.
December turkey production was 470 million pounds, which brought the 2020 fourth quarter amount to 1.45 billion pounds, the report noted.
Production increased by 24 million pounds in December, a 5.3 percent increase from 2019.
Turkey production in 2020 was 5.74 billion pounds, 1.3 percent less than the previous year. The 2021 production is forecasted at 5.72 billion pounds, which is almost a zero percent change, USDA said.
“Annual production … has been declining since 2017, which was also the last time production stayed level year-over-year,” ERS noted.
Turkey exports in December were reported at 46.4 million pounds, which is down 1.2 percent from 2019. Total 2020 turkey exports were 571.4 million, a decrease of 10.6 percent year-over-year. On average, turkey exports are 10 percent of domestic U.S. production, the department noted.
“China’s share of U.S. turkey exports was 4.4 percent in December and 6.7 percent on an annual basis. In November 2019, China lifted a ban on imports of U.S. poultry that had been in place since an avian flu outbreak in late 2014,” ERS said. “Between 2010 and 2014, China’s share of U.S. turkey exports averaged 11.4 percent. China’s share of U.S. turkey exports in 2020 was still below the 7.3 percent share it had in 2014.
“Mexico, the largest export market for U.S. turkey, had an average of 59 percent of U.S. turkey exports annually between 2010 and 2019. In 2020, both total exports and exports to Mexico declined from 2019, and Mexico accounted for 64 percent of total exports.”
Turkey exports to other nations saw a decrease of about 83 million pounds between 2019 and 2020. Among the largest decreased were to Benin (15.6 million pounds less), Hong Kong (13.4 million pounds less), South Africa (12.1 million pounds less), Peru (10.9 million pounds less), and Japan (9 million pounds less).
“The 2021 turkey export forecast was adjusted down by 10 million pounds in the first quarter (of 2021) and 5 million pounds in the second quarter on expectations of decreasing international demand,” ERS said. “This brings the annual forecast to 575 million pounds.”
The wholesale price in January for whole frozen turkey hens averaged $1.08 cents per pound, 13.3 percent more than the same month in 2019, the report added.
“Prices are beginning the year strong and are expected to remain so for most of the year,” ERS said. “Forecast prices for 2021 were adjusted up by 5 cents in each of the first two quarters to $1.09 and $1.11 per pound, respectively.”
For the third quarter the per pound price for turkey is estimated at $1.12 per pound.
And for the fourth quarter, holiday period of 2021, the USDA is expecting the average turkey per pound price to also be $1.11 per pound.