U.S. Poultry Market to Continue Modest but Robust Growth

Albeit the U.S. weakened its position as a key global poultry supplier due to a ban introduced by China and Russia, the U.S. poultry industry is to benefit from strong domestic demand driven by growth of population, relatively low poultry cost among the other types of meat and lack of religious restrictions of poultry consumption.

The U.S. poultry market amounted to X tonnes in 2016, increasing steadily from 2007-2016 with mild fluctuations in certain years. According to market research conducted by IndexBox, in wholesale prices, the market reached $X in 2016, expanding with an annual average growth rate of +X%. This figure reflects total revenue of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price).

The U.S. is one of the major global poultry producers: the country's poultry industry has a stable, solid foundation and the industry boasts a number of market competitors. Therefore, the national production of poultry is almost fully satiate domestic demand - the import share in total consumption did not exceed X% from 2008 to 2016. Due to low trade intensity, imports should not be regarded as strong factors influencing U.S. market dynamics in the medium term.

Given the strength of the domestic industry, significant amounts of poultry are intended for exports. Moreover, the U.S. remains the second world's largest poultry exporter, following only Brazil. From 2007-2014, U.S. poultry exports maintained relative stable trend with regard to the export volumes; however, it dropped dramatically in 2015 by X% y-o-y and then stabilized at the level of X tonnes in 2016. This sharp reduction was due to the suspension of supplies to China and Russia, which previously constituted the two major export markets. The Chinese Government banned poultry imports from the U.S. in 2015, which was motivated by bird diseases found in American poultry. In addition, the Russian ban was implemented in the same year as a counteraction to sanctions forced by the U.S. against Russia due to geopolitical tensions. As a result, the share of exports in poultry production in the U.S. fell from X% in 2008 to X% in 2016. This significantly weakened the U.S.'s position as a key poultry supplier to the global market - the share of the U.S. in terms of global exports contracted from X% in 2008 to X% in 2016.

Export decline forced American poultry producers to source new markets or redirect their products onto the domestic market. These unsold poultry products resulted in an increased market supply and a slight fall in prices. With regard to export markets, Mexico (X tonnes), Hong Kong (China SAR) (X tonnes), Cuba (X thousand tonnes), Canada (X thousand tonnes and Angola (X tonnes) represented the main destinations for U.S. poultry exports in 2016, together comprising X% of U.S. exports. Hong Kong and Mexico became the fastest growing destinations: from 2007 to 2016, average annual rates of growth with regard to poultry exports to these markets stood at +X% and +X%, respectively.

Poultry constitutes one of the most widely consumed types of meat, both in the U.S. and worldwide. This can be explained by the product's relatively low cost and the fact that it boasts a shorter cooking time than other types of meat. In addition, due to consumer beliefs that eating poultry boasts more health benefits than its red meat alternative, the lack of religious restrictions regarding poultry consumption and its use as a key component ingredient in many dishes, poultry meat is now regarded as a universal product consumed by many people, in various income brackets and with different religious convictions.

Chicken meat remains a major poultry product in the U.S. with approx. X tonnes consumed in 2016, which accounted for X% of the total consumption. Turkey meat constitutes the second largest product, lagging far behind in terms of consumption with nearly X tonnes in 2016. Consequently, chicken meat had the highest level of per capita consumption - it reached X kg per year in 2016, which was over six times more than the per capita consumption of turkey meat (X kg per year).

The accelerating pace of urban life, meanwhile, has necessitated the need for products with a reduced preparation time. The poultry companies have live up to the challenge by coming up with a number of products requiring minimum time and effort in the kitchen, such as pre-marinated poultry meat, pan-ready or microwaveable dishes, and pre-packaged cooked meals. In addition, chicken is considered to be the healthiest type of meat and is also low in fat, which will support the consumption growth.

As expected, an increase in consumption is set to continue in the medium term; the driving impetus for this will be U.S. population growth, particularly among those with average to low incomes and the Latin American immigrants. Along with the popular trend of maintaining a healthy diet, these factors indicate that the U.S. poultry consumption is expected to continue its upward trend. Market performance is forecast to grow with an anticipated CAGR of +X% for the nine-year period from 2016 to X, which is then projected to lead the market volume to X tonnes by X.

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• poultry price forecast
• key poultry producers

Source: U.S. Poultry Market - Analysis And Forecast to X