Chicken Demand Wanes, As Cheaper Pork and Beef Dominates Dinner
Consumers in the U.S. are eating more U.S. beef and pork at lower prices, pressuring the chicken sector.
Sara Brown, Drovers
December 3, 2018
One upside from the many trade war tensions? Consumers in the U.S. are eating more U.S. beef and pork at lower prices.
Expansion by U.S. cattle and hog producers for the past year was on track to put a large amount of meat on the market. When China and Mexico issued tariffs against U.S. red meat exports, many feared a pileup of meat supplies would drive down prices. But even through the trade headwinds, domestic demand has kept pace.
Where it has hurt, however, is in the chicken aisle. Reuters reports chicken producers would generally lose money or break even in the fourth quarter of 2018.
Tyson reported last week that quarterly sales missed Wall Street estimates, sending shares lower, even as the company posted a profit. Operating income from chicken fell nearly 34% from a year earlier, while beef operating income was up about 14%.
The pain for chicken producers and the increased appetite for pork are ripple effects of Trump's trade disputes, which have also reduced shipments of U.S. soybeans and sorghum to China.
The shift is hurting chicken producers, such as Tyson Foods Inc., and Sanderson Farms Inc., said Bill Roenigk, an agricultural economist and consultant for the National Chicken Council trade group, in this Reuters article. He said the chicken sector would generally lose money or break even in the fourth quarter of 2018.
"With all that pork on the market," Roenigk said, "it has spilled over to affecting consumers' demand for chicken."
USDA projects per capita chicken consumption will rise only about 1.2% next year, compared to gains of 4.3% for pork and 2.6% for beef.
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