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Soft poultry market results in some slowing of production

Posted online

by Jan K. Allen

SBJ Contributing Writer

The poultry market in general has been termed soft in recent months because of decreased exports to Eastern Europe and Asian countries, said Steve Bingham, owner and president of Bingham Poultry.

Bingham, whose brokerage markets processed chicken and chicken parts, said statistics show demand for dark meat has been down nearly 60 percent in the last few months.

Dark meat is what the producers traditionally export, and demand has dropped among some of the biggest foreign buyers like Russia and China.

Demand for whole birds and light meat have stayed up due to their continued popularity in the United States, and other foreign markets have stepped in to fill the gap in Eastern trade.

Generally there is an abundant supply of chicken and chicken parts, which has driven prices down at the production and wholesale level.

Bingham said he doesn't see much of the savings passed along to the consumer.

Most of the poultry produced in the United States is grown in the Southeast. States most involved in poultry production are Alabama, Georgia, the Carolinas, Mississippi, Arkansas and Texas.

Statistics from Urner-Berry Publication, a company that forecasts the chicken market, said demand for production of U.S. whole fryers is up.

According to a recent market newsletter, exports on broilers are up in South Africa, have increased in Mexico and zoomed up 94 percent in Hong Kong. Demand for cut-ups has also gone up in Japan by 8 percent and in Mexico by 13 percent.

The demand for white meat and whole birds helps offset some of the decreased sales of the cheaper dark meat typically sold in these markets.

In the turkey business, production has gone down in an effort to keep prices from dropping, according to local brokers.

Producers have pulled back on production to avoid a glut and keep the market steady, said Rex Johnson, owner of Arlyn Johnson and Associates, turkey brokers.

Johnson said though Mexico and other foreign markets have stayed strong, the reduction in demand for dark meat in Russia and some of the Asian countries has caused an overall slump in 1998.

Production was down close to 5 percent over the year, Johnson said.

In the United States, demand for the the whole bird, which comprises 30 percent to 35 percent of the domestic market, has stayed constant.

According to the National Turkey Federation, 90 percent of American families eat turkey on Thanksgiving.

Even though the chicken and turkey markets share some similarities, there are also some significant differences. Chicken is big in the summertime for barbecues and picnics. Turkey is served at large gatherings, typically Thanksgiving, Christmas and, to a lesser degree, at Easter.

The turkey market can be affected by several factors, including the ups and downs of foreign trade.

Pork is a big competitor for turkey meat, and the over-supply in this industry has driven prices down to make ham and pork roast an attractive alternative.

Disease is a real concern in the business, although this hasn't been a big problem this year, Johnson said.

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