usa poultry & egg export council

State Corn Executives MissionState Corn Executives Mission

USA Poultry & Egg Export USA Poultry & Egg Export CouncilCouncil

What’s the Big Deal About Poultry?What’s the Big Deal About Poultry?

April 28, 2005April 28, 2005

Warsaw, PolandWarsaw, Poland


What is USAPEEC?What is USAPEEC?

• Non-Profit Trade Non-Profit Trade AssociationAssociation

• Founded in 1984Founded in 1984• About 200 member About 200 member

companies that account companies that account for more than 95% of all for more than 95% of all poultry & eggs exported poultry & eggs exported from U.S.from U.S.


USAPEEC’s MissionUSAPEEC’s Mission

• To increase U.S. poultry To increase U.S. poultry & egg exports by & egg exports by opening, maintaining and opening, maintaining and developing markets developing markets around the world.around the world.

• To serve as the To serve as the industry’s voice on trade industry’s voice on trade policy issues.policy issues.


USAPEEC Atlanta StaffUSAPEEC Atlanta Staff

Ernesto Ernesto BaronBaron

Brent Brent DanielsonDanielson

Dr. Mark Dr. Mark LobsteinLobstein

Kay PhielKay Phiel

Jennifer Jennifer GeckGeck

Shep TullerShep Tuller

Jean Jean MurphyMurphy Greg TylerGreg Tyler

Toby MooreToby Moore

Nanci JohnsNanci Johns

Barbara Barbara MooreMoore

Jim SumnerJim Sumner


Resources of USAPEEC’s foreign offices

• On location On location market & market & economic economic intelligenceintelligence

• Relation Relation building with building with potential potential importersimporters

• Educational & Educational & promotional promotional activitiesactivities

• Trade Shows, Trade Shows, buying buying missions, and missions, and other activitiesother activities


USAPEEC MembersUSAPEEC Members

ProcessorsProcessors5252Trading CompaniesTrading Companies7979Commodity GroupsCommodity Groups1111Associate Members Associate Members 6969TotalTotal 211211


FMD17%

Industry32%

Commodity17%

MAP34%

FMD

MAP

Commodity

Industry

USAPEEC’s Funding: Total budget $7.5 millionUSAPEEC’s Funding: Total budget $7.5 million


Non-Government FundingNon-Government Funding

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

2002 2003 2004 2005

Increase of Increase of 45.3%45.3%


Don’t the big Don’t the big producers like Tyson producers like Tyson control USAPEEC?control USAPEEC?


•Board of Directors is structured on a one-Board of Directors is structured on a one-company, one-vote basis, regardless of company, one-vote basis, regardless of dues.dues.

•Board has up to 25 members from Board has up to 25 members from processors, trading companies, and processors, trading companies, and associate members.associate members.

•Elected to 3-year termsElected to 3-year terms

•Commodities get a seat on the board Commodities get a seat on the board for 1-year termsfor 1-year terms

•Board members are nominated by a Board members are nominated by a nominating committee, which is made up nominating committee, which is made up of members from the Executive of members from the Executive Committee.Committee.

•Executive Committee has 8 members.Executive Committee has 8 members.

All For One and One for AllAll For One and One for All


•Summary of the U.S. poultry industrySummary of the U.S. poultry industry

•Volume of grains used by the U.S. Volume of grains used by the U.S. poultry industrypoultry industry

•Effects of poultry trade on grain Effects of poultry trade on grain farmersfarmers

•Summary of the Russian marketSummary of the Russian market

•Value of your supportValue of your support

•Questions?Questions?

Today’s Hot TopicsToday’s Hot Topics


Total poultry meat Total poultry meat production = production = estimated 41.2 estimated 41.2 billion pounds in billion pounds in 2005. (18.7 million 2005. (18.7 million metric tons)metric tons)

85% broiler meat 85% broiler meat 14% turkey meat 14% turkey meat 1% other chicken1% other chicken


Why doesn’t the Why doesn’t the poultry industry have a poultry industry have a check-off?check-off?


•Research, promotion, and education are Research, promotion, and education are very important to our industry.very important to our industry.

•Industry-supported organizations:Industry-supported organizations:

•US Poultry & Egg AssociationUS Poultry & Egg Association

•Spends millions each year on research Spends millions each year on research projects at universitiesprojects at universities

•Organizes the International Poultry Expo Organizes the International Poultry Expo every January every January

•National Chicken Council & National Turkey National Chicken Council & National Turkey FederationFederation

•Promote consumptionPromote consumption

•Engage in lobbyingEngage in lobbying

Poultry: Please don’t let me be MisunderstoodPoultry: Please don’t let me be Misunderstood


•Vertically integratedVertically integrated

•Single company involved in every stage of Single company involved in every stage of production, processing, and marketing.production, processing, and marketing.

•Allows industry to take advantage of new Allows industry to take advantage of new technologies to be more efficient, responsive, technologies to be more efficient, responsive, and profitable.and profitable.



Broiler ProductionBroiler ProductionGrower supplies:Grower supplies:

–Growout houseGrowout house

–LaborLabor

Processor Processor supplies:supplies:

–ChicksChicks

–FeedFeed

–MedicinesMedicines


•Poultry companies prefer to do their own Poultry companies prefer to do their own advertising.advertising.

•They spend millions advertising their brands They spend millions advertising their brands every year.every year.

•They know that competition in export They know that competition in export markets is between themselves NOT poultry markets is between themselves NOT poultry and beef.and beef.

•USAPEEC doesn’t engage in branding USAPEEC doesn’t engage in branding promotions.promotions.



Isn’t poultry really just Isn’t poultry really just a “Southern” thing?a “Southern” thing?


Chicken Production, 2003Chicken Production, 2003(In Million lbs)(In Million lbs)

0-.5 mil .5-2 mil 2 mil+

Source: NASSSource: NASS


Turkey Production, 2003Turkey Production, 2003(In Million lbs)(In Million lbs)

0-50 50-300 300+



Egg Production, 2003Egg Production, 2003

0-$75 $75-200 $200+

(Value in Million US$)(Value in Million US$)



Last year the U.S. Last year the U.S. broiler and turkey broiler and turkey industries spent industries spent $7.9 $7.9 BillionBillion on corn and on corn and soybean meal.soybean meal.

Believe It or Believe It or Not…Not…

Source: National Chicken CouncilSource: National Chicken Council


Soybean Production, 2000Soybean Production, 2000(In million bushels produced)(In million bushels produced)

0-50 50-100 100+

Source: USB Soy StatsSource: USB Soy Stats


Corn Production, 2003Corn Production, 2003(In million bushels produced)(In million bushels produced)

0-100 100-200 200+

Source: NCGASource: NCGA


Since the Midwest Since the Midwest produces a wealth of produces a wealth of corn and soybeans, corn and soybeans, these states are vital these states are vital to the poultry to the poultry industry’s success.industry’s success.


Does poultry really Does poultry really consume that much consume that much corn and soybeans?corn and soybeans?



U.S. Corn Use by LivestockU.S. Corn Use by Livestock5.2 Billion Corn Bushels Consumed Annually by 5.2 Billion Corn Bushels Consumed Annually by

LivestockLivestock

Beef30%

Poultry28%

Pork23%

Dairy14%

Other5%


Annual Annual production of production of U.S. poultry U.S. poultry consumes consumes

more than 1.3 more than 1.3 billion bushels billion bushels

of corn.of corn.Source: National Chicken CouncilSource: National Chicken Council


Poultry consume about Poultry consume about 15% of the U.S. corn and 15% of the U.S. corn and

soybean cropssoybean crops


Source: Soy Source: Soy Stats, USBStats, USB

How Important is Your #1 How Important is Your #1 Customer?Customer?

U.S. Soybean Meal Use by LivestockU.S. Soybean Meal Use by Livestock

Pet Food2%

Dairy6%

Poultry and Eggs53%

Other3%

Beef12%

Pork24%


1 out of every 1 out of every 6 bushels of 6 bushels of soybeans is soybeans is

consumed by consumed by the U.S. the U.S. poultry poultry

industry.industry.

Source: Soy Stats, USBSource: Soy Stats, USB


Feed/Residual58%

Export19%

Other8%

Ethanol9%

HFCS6%

U.S. Corn U.S. Corn UsageUsage



Doesn’t it seem like Doesn’t it seem like poultry is so efficient poultry is so efficient in feed conversion that in feed conversion that it barely uses any it barely uses any corn?corn?


•Grow-out is only 4-6 weeks.Grow-out is only 4-6 weeks.

•Chicken consumption is higher Chicken consumption is higher than all other meats.than all other meats.

•A more efficient poultry industry A more efficient poultry industry helps you too.helps you too.

•Poultry becomes cheaper for Poultry becomes cheaper for consumers, consumption rises, consumers, consumption rises, and production goes upand production goes up

Did You Consider…Did You Consider…


00.5

11.5

22.5

33.5

44.5

5

Feed Conversions: 1925-2005Feed Conversions: 1925-2005(Pounds of feed to 1 lb of broiler, (Pounds of feed to 1 lb of broiler,

liveweight)liveweight)



Chicken is the FutureChicken is the Future


Total U.S. Broiler ProductionTotal U.S. Broiler Production

0

5

10

15

20

25

30

35

40

1955 1965 1975 1985 1995 1997 1999 2001 2003 2005p

Billion Pounds

p=projection


U.S. Broiler ExportsU.S. Broiler ExportsIn Corn & Soybean Million Bushel EquivalentsIn Corn & Soybean Million Bushel Equivalents

Source: USDA/FAS, NCCSource: USDA/FAS, NCC

020

406080

100

120140160180

200

soybean

corn


U.S. Broiler Export MarketsU.S. Broiler Export Markets20042004

Primary MarketsPrimary MarketsRussiaRussia ($492 million, 28% of U.S. ($492 million, 28% of U.S.

Exports)Exports)CanadaCanada ($257 million, 15% of U.S. Exports)($257 million, 15% of U.S. Exports)MexicoMexico ($122 million, 7% of U.S. Exports)($122 million, 7% of U.S. Exports)UkraineUkraine ($85 million, 5% of U.S. Exports)($85 million, 5% of U.S. Exports)Hong KongHong Kong ($73 million, 4% of U.S. Exports)($73 million, 4% of U.S. Exports)TurkeyTurkey ($64 million, 4% of U.S. Exports)($64 million, 4% of U.S. Exports)CubaCuba ($57 million, 3% of U.S. Exports)($57 million, 3% of U.S. Exports)


SourceSource: USDA/FAS, NTFUSDA/FAS, NTF

U.S. Turkey ExportsU.S. Turkey ExportsIn Corn & Soybean Million Bushel EquivalentsIn Corn & Soybean Million Bushel Equivalents

0

5

10

15

20

25

30

soybean

corn


It Takes 3.5 lbs. of Feed to Produce 1 It Takes 3.5 lbs. of Feed to Produce 1 Dozen Shell EggsDozen Shell Eggs

Soybeans, including vitamins

34%

Corn66%

Corn

Soybeansincluding vitamins

Source: United Egg ProducersSource: United Egg Producers


Don’ t the poultry and Don’ t the poultry and beef industries beef industries compete against each compete against each other?other?


•Poultry is not in direct competition with Poultry is not in direct competition with other meats.other meats.

•Poultry actually competes more with Poultry actually competes more with other poultry products in the export other poultry products in the export markets.markets.

•Product taken off the domestic market Product taken off the domestic market benefits all US producers of meat (white benefits all US producers of meat (white and red).and red).

•Without int’l markets, more product Without int’l markets, more product stays on the US market.stays on the US market.

•Causes prices to be lower for all meats.Causes prices to be lower for all meats.

Poultry & Beef: Friends or Foes?Poultry & Beef: Friends or Foes?



•Russian Poultry Ban caused prices for all Russian Poultry Ban caused prices for all meats to go down.meats to go down.

•BSE crisis caused wholesale chicken BSE crisis caused wholesale chicken prices to depress by $.01 per lb.prices to depress by $.01 per lb.

•Caused our industry to lose $300-400 Caused our industry to lose $300-400 million in revenuemillion in revenue

Tumbling, Tumbling Down…Tumbling, Tumbling Down…


•Food safety campaigns for meats Food safety campaigns for meats compliment each othercompliment each other

•Helps counteract misinformation in Helps counteract misinformation in foreign markets like Japanforeign markets like Japan

•St. Louis ProjectSt. Louis Project

•Grains, oilseeds, poultry and beef are Grains, oilseeds, poultry and beef are working togetherworking together

•Deli seminars in the Caribbean and Deli seminars in the Caribbean and Central AmericaCentral America

•Joint promotion for beef, pork, poultry, Joint promotion for beef, pork, poultry, and dairy industriesand dairy industries

Strength in NumbersStrength in Numbers


Is poultry trade really Is poultry trade really that important?that important?


•In 2004 about 140 million corn In 2004 about 140 million corn bushels and 40 million soybean bushels and 40 million soybean bushels were exported through bushels were exported through poultrypoultry

•Poultry exports to RussiaPoultry exports to Russia

•38 million corn bushels38 million corn bushels

•11 million soybean bushels11 million soybean bushels

•Poultry exports to MexicoPoultry exports to Mexico

•17 million corn bushels17 million corn bushels

•5 million soybean bushels5 million soybean bushels

Did You Consider…Did You Consider…


•Without int’l markets, more product Without int’l markets, more product stays in the US.stays in the US.

•That’s a lot of dark meat.That’s a lot of dark meat.

•If China won’t take our chicken feet or If China won’t take our chicken feet or paws…paws…

•Lose of millions from a closed marketLose of millions from a closed market

•Will be forced to create a demand in Will be forced to create a demand in the USthe US

Beer & Wings or Beer & Paws?Beer & Wings or Beer & Paws?


It’s What’s For Dinner…It’s What’s For Dinner…


2005 Projected World Broiler 2005 Projected World Broiler ProductionProduction

Dominated by Five PlayersDominated by Five Players

0

2

4

6

8

10

12

14

16

U.S. China Brazil EU-25 Mexico Rest ofthe World

Million Metric Tons


Isn’t BSE really the Isn’t BSE really the only disease outbreak only disease outbreak that can hurt grain that can hurt grain farmers?farmers?


•BSE hurt poultry too!BSE hurt poultry too!

•Newcastle Disease (END) in California Newcastle Disease (END) in California and Western USand Western US

•NE corn is going to the California NE corn is going to the California poultry industrypoultry industry

•First outbreak occurred Oct. 2002First outbreak occurred Oct. 2002

•11 months from discovery to 11 months from discovery to eradicationeradication

•4 countries imposed nationwide bans 4 countries imposed nationwide bans and all others imposed regionalized and all others imposed regionalized bansbans

•Over 3 million birds depopulatedOver 3 million birds depopulated

•$262 million in estimated losses$262 million in estimated losses

What You Don’t Know Can Hurt YouWhat You Don’t Know Can Hurt You


•Avian InfluenzaAvian Influenza

•Over 50 countries imposed bans on Over 50 countries imposed bans on US poultryUS poultry

•Impact of these unjustifiable bans is Impact of these unjustifiable bans is worst in memoryworst in memory

•We stand to lose We stand to lose $10 Billion$10 Billion due to AI due to AI

•China imposed a 9-month nationwide China imposed a 9-month nationwide banban

•Brazil and Argentina were able to enter Brazil and Argentina were able to enter the marketthe market

What You Don’t Know Can Hurt You, cont.What You Don’t Know Can Hurt You, cont.


Russia may be the top Russia may be the top market for US poultry, market for US poultry, but are there still but are there still opportunities for opportunities for growth?growth?


Should the corn Should the corn industry be active in industry be active in organizations like organizations like USAPEEC?USAPEEC?


What Can USAPEEC Do for Grain What Can USAPEEC Do for Grain Farmers?Farmers?

• Provide information on trade Provide information on trade issuesissues

• Your support could start a new Your support could start a new market or maintain an existing onemarket or maintain an existing one

• Attend USAPEEC Winter, Staff, and Attend USAPEEC Winter, Staff, and Annual MeetingsAnnual Meetings

• Receive a weekly newsletter on Receive a weekly newsletter on trade analysistrade analysis

• Resources of USAPEEC foreign Resources of USAPEEC foreign officesoffices

• Receive copies of quarterly reports Receive copies of quarterly reports concerning all commodity funded concerning all commodity funded promotionspromotions


USAPEEC: Your Source for USAPEEC: Your Source for InformationInformation

• Frequent, even daily e-Frequent, even daily e-mail updatesmail updates

• Monitor all issues Monitor all issues affecting poultry tradeaffecting poultry trade

• Keep pressure on both Keep pressure on both Washington and foreign Washington and foreign governmentsgovernments

• Conduit for getting U.S. Conduit for getting U.S. industry info to industry info to American negotiatorsAmerican negotiators


•Get to know our staff and membersGet to know our staff and members

•Visit our newly expanded office in Stone Visit our newly expanded office in Stone MountainMountain

•Learn what we stand forLearn what we stand for

•Learn what you can/can’t impactLearn what you can/can’t impact

•Visit a poultry plantVisit a poultry plant

•Attend more of our meetingsAttend more of our meetings

•Be involved on our Trade Policy Task Be involved on our Trade Policy Task Force or Market Development CommitteeForce or Market Development Committee

Get To Know Us BetterGet To Know Us Better


Let USAPEEC a”maize” Let USAPEEC a”maize” you!you!

usa poultry & egg export council

Documents