by Marsha Laux, content specialist, AgMRC, Iowa State University, mlaux@iastate.edu

Updated May 2008 by Brianna Morrison, student, Iowa State University.

Overview

The United States is the world’s largest producer and the second largest exporter of poultry meat according to the Economic Research Service (ERS) of USDA. The total farm value of U.S. poultry production in 2007 was $31.9 billion. Of that total farm value, broiler production accounted for $21.5 billion, eggs for $6.68 billion, turkey for $3.71 billion and other chicken for $50.8 million. Of the combined total of U.S. poultry production in 2007, 67 percent was broiler meat, 21 percent was eggs, 12 percent was turkey meat and less than 1 percent was other chicken meat.

Production
The United States led the world in broiler production with a total of 16 million metric tons (MT) of ready-to-cook-equivalent broiler products in 2007. The value of broilers produced that year was $21.5 billion, up 21 percent from 2006. The average price per pound was 43.6 cents, compared with 36.3 cents in 2006.

U.S. broiler production is more highly concentrated in a region stretching from Delaware, south along the Atlantic coast to Georgia, then westward through Alabama, Mississippi and Arkansas. These states accounted for more than 70 percent of the broilers produced in the United States.   

Other world leaders in broiler production for 2007 were China with 10.8 million MT, Brazil with 10.1 million MT, the European Union with 8 million MT, Mexico with 2.6 million MT and India with 2.2 million MT. Consumption of broiler products ranked in order as follows: the United States with 13.6 million metric tons, China with 11, European Union with 7.8, Brazil with 7.2, Mexico with 3, Japan with 1.9 and the Russian Federation with 2.5 million metric tons consumed for 2007.

Demand

Consumption of poultry meat is considerably higher than either beef or pork, but less than total red meat consumption, according to the ERS. Total meat consumption (red meat, poultry and fish) in 1975 was 170.9 pounds per person, while in 2005 it rose to 200 pounds per person. According to the ERS, each American consumed an average of 17 pounds less red meat (mostly less beef) than in 1970, 40 pounds more poultry, and 4.0 pounds more fish. 

Meat consumption trends from 1975 to 2005 are reflected in the following table:

Pounds Per Person Consumed 1975-2005  (boneless, trimmed equivalent)

Source: ERS, USDA.  

Per capita consumption of poultry steadily increased from 1975 to 2005 from 32.9 pounds per capita to 73.6 pounds per capita. Increased poultry demand was driven by nutritional concerns about fat and cholesterol levels in beef and also due to a lack of convenience in preparation of beef. Poultry products responded to consumer demands by providing brand-name, value-added products processed for consumers’ convenience and products for use in foodservice. During the same period, pork consumption remained relatively steady and fish consumption rose steadily.

Poultry and eggs products are expected to have higher domestic and foreign demand. Consumers demanding low-cost, healthy and convenient meat products will continue to drive poultry increased production. 

Exports

Poultry is the largest meat export flow from the United States in volume, according to the ERS. Also, the United States is the world’s largest exporter of broilers and turkey products. In 2007, the ERS reported that broiler exports totaled 5.77 billion pounds. Most broilers are exported to Russia and China.  

While U.S. consumers value white poultry meat, consumers in other countries place a premium on dark meat. This dark meat preference by other countries creates a favorable situation for the U.S. producers.   

Supply

The combined value of the U.S. production from broilers, eggs, turkeys and the value of sales from chickens in 2007 was $31.9 billion, up 24 percent from the $25.8 billion the previous year. Of that combined total, 67 percent was from boilers, 21 percent from eggs, 12 percent from turkeys, and less than 1 percent from other chickens. When stated in numbers, 8.90 billion broilers, 90.6 billion eggs, 7.87 billion pounds of turkey and 167 million chickens were produced in the United States during 2007.

Competitiveness

The U.S. poultry industry is characterized by a majority of vertically integrated systems. Vertical integration is characterized by contracts and common ownership of production and processing. The 1950s saw expansion of vertical integration and by 1977, 85 percent of broilers, turkeys and eggs were in vertically integrated systems. In 2003, more than 90 percent of the poultry in the United States was vertically integrated.

The vertical integration has resulted in improved production efficiencies in the poultry industry. It also has benefited from consumer’s interest in lower fat sources of protein and has responded to the demand for more convenient products. The industry has continually provided increased brand name, processed products. The availability of value-added products and the other industry changes have resulted in large supplies of poultry products that were relatively low-priced meat sources.

The poultry firms of the United States are competing in a global marketplace. The five largest U.S. poultry firms are as follows:

Emerging Developments and Issues to Follow

Diseases in poultry flocks have caused economic losses, in addition to having harmed international trade. Two harmful diseases to poultry are avian influenza and Exotic Newcastle Disease (END). END produces significant sudden death loss in poultry flocks and involves quarantine procedures. END does not affect humans; chickens and eggs are safe to eat. However, the disease can spread rapidly and has extensive flock losses.
 

In additional to diseases, another factor creating uncertainties in the poultry industry is the new animal health welfare guidelines for poultry and egg producers. Production capacity will be an issue that will be affected, as will other factors related to the flock certification process. Environmental and political concerns have had an impact on the poultry industry. Restrictions on the placement of livestock production facilities and limitations surrounding the disposal or usage of poultry litter have also been issues of concern for poultry producers.

Additionally, convenience is an important factor when consumers make food purchases. The trend to eat more prepared and processed foods and the trend to eat more meals away from home is a trend to monitor in the food industry. Value-added poultry products that cater to the ready-to-cook, heat-and-serve or ready-to-eat markets are expected to see continued growth. Egg products and eggs for use in processed and prepared food items are also expected to experience continued growth.

Sources

Agricultural Marketing Service, USDA.

Foreign Agricultural Service, USDA.

Poultry and Eggs Briefing Room, Economic Research Service, USDA.

Poultry Plants Lowering Production Costs and Increasing Variety, Economic Research Service, USDA, 2000 - This article discusses the structural changes in the U.S. food industry.

Vertical Coordination of Marketing Systems: Lessons from the Poultry, Egg and Pork Industries, Economic Research Service, USDA, 2002 -  This 45-page report reviews how these three industries placed a premium on quality control and information to improve the control of production.

Vertical Coordination in the Pork and Broiler Industries: Implications for Pork and Chicken Products, Economic Research Service, USDA, 1999 - This 48-page report compares vertical coordination changes in the U.S. pork to the U.S. broiler industry.


Profile created October 2003 and updated May 2008.