U.S. poultry growers to benefit from China's protein shortage, industry expert says

ATLANTA, Georgia -- What's the biggest result of the spread of African Swine Fever, an increased demand for poultry production around the world, according to one world protein specialist.

Nan-Dirk Mulder, a Global Protein Specialist for Rabobank, presented the lecture "Insights, risks and opportunities within the Poultry Industry" recently at the International Producing and Processing Expo.

In his presentation, Mulder laid out a case that the biggest impact of the swine fever is the increased interest in poultry markets. Mulder sees the drop in hog production resulted in more demand for poultry and higher chicken production all over the world.

"It is the biggest disruptive period in many years. Since 2018, ASF has spread through China resulting in a production drop (of pork) of 25% in 2019. An additional 50% drop is expected this year in China. This is huge impact on global markets because China has a shortage of proteins. The disease has already spread to other parts of Asian like Vietnam, Philippines, Laos," said Mulder.

"We need to produce more protein. We need more supply and there will be more opportunities for investment in poultry. The Asians are investing first and already China has added 50% more investment in chicken production, Vietnam is growing from 10% to 15%," added the global protein specialist.

While Brazil is the most competitive nation in the poultry market, with the strongest growth of exports in recent years, Mulder is very optimistic about the opportunities for U.S. producers.

In 2019, the U.S. poultry and poultry product exports totaled $4.25 billion worth, nearly equal to 2018 sales.

As the 51st ($10.3 million worth of purchases) largest buyer of U.S. poultry meat or poultry products in 2019, China has a lot of room to grow. Last year's biggest U.S. customers of poultry meat and poultry products included countries such as Mexico ($1.07 billion), Hong Kong ($354 million), Canada ($353 million), Cuba ($190 million) and Taiwan ($187 million).
"U.S. poultry exports will also grow because of the new trade agreements. Brazil benefited during the trade war, but now it is time for the U.S. to catch up. If you do the math, the second cheapest production cost in the world is the U.S. [after Brazil]," stated Mulder.

In addition, Mulder sees both U.S. and Brazilian producers benefitting from population growth in Latin America. "The poultry demand in Latin America countries grows from 3% to 4% per year," Mulder says.

The top emerging poultry market is Russia, he says. "Nobody will grow more than Russia in the world markets in the coming years. They have a competitive poultry production and it is the best time to become new export players," Mulder says.