Dive Brief:

  • The Chinese authorities mentioned Thursday it will instantly resume importing hen and turkey merchandise from the U.S. China banned U.S poultry and eggs in January 2015 following an avian flu outbreak, which, based on The Wall Street Journal, the Agriculture Department mentioned the U.S. has been freed from for greater than two years.

  • The transfer might imply greater than $1 billion in annual shipments to China, U.S. Trade Representative Robert Lighthizer advised the newspaper. The National Chicken Council mentioned in a press release entry to China’s market might imply that quantity in hen toes gross sales alone and as a lot as $1.2 billion in different merchandise — leg and breast meat, turkeys and poultry breeding inventory.

  • “The United States welcomes China’s choice to lastly raise its unwarranted ban on U.S. poultry and poultry merchandise,” Lighthizer mentioned in a press release. “China is a vital export marketplace for America’s poultry farmers, … Reopening China to U.S. poultry will create new export alternatives for our poultry farmers and help 1000’s of staff employed by the U.S. poultry business.”

Dive Insight:

While this improvement is a giant win for poultry producers, processors and exporters, it could additionally signify a willingness on China’s half to indicate U.S. commerce negotiators that it is critical about opening up its markets to U.S. merchandise. The timing of the announcement is also attention-grabbing as a result of it comes whereas the 2 governments have been negotiating buying and selling circumstances as a part of a broader ongoing dispute.

Poultry business teams have been predictably happy with the event as a result of the annual worth of U.S. exports to China at their peak have been $722 million for hen and $71 million for turkey, based on a joint assertion from the National Chicken Council, National Turkey Federation and USA Poultry & Egg Export Council. The U.S. exported greater than $500 million price of poultry merchandise to China in 2013, based on the U.S. authorities.

Tyson Foods and Pilgrim’s Pride welcomed renewed export alternatives to China.The Wall Street Journal famous that without China shopping for U.S. poultry, many U.S. hen corporations determined to ship their hen toes to rendering vegetation making pet-food components.

“The news that China will lift its ban on U.S. poultry is good news for American poultry farmers and our U.S.-based company,” a Tyson Foods spokesperson advised Food Dive in a press release. “China has been a big marketplace for poultry previously and we sit up for new export alternatives ensuing from this opening.

U.S. poultry corporations have been taking different steps to diversify whereas the Chinese import ban was in impact. Last yr, Tyson acquired Keystone Foods, a subsidiary of Brazil’s Marfrig Global Foods, for $2.16 billion, which was considered as serving to the corporate place itself internationally regardless of ongoing commerce disputes with China, Canada and Mexico. Keystone is a serious provider of beef, hen and fish merchandise to McDonald’s. Tyson has additionally been investing in hen processing vegetation within the U.S. so as to meet the rising demand.

This summer time, Pilgrim’s Pride acquired Tulip, a U.K.-based supplier of meat merchandise to the retail and foodservice sectors, from the Danish Crown Group for about $354 million. The acquisition of Tulip, the biggest pork producer within the U.K., with nearly $1.1 billion in annual gross sales, was meant to strengthen the corporate’s European meals platform. In 2017, Pilgrim’s additionally purchased Moy Park, a poultry producer primarily based in Northern Ireland.

According to Statista, U.S. per-capita consumption of poultry has been steadily rising since 2013. Total consumption of broiler, different hen and turkey merchandise reached 92.1 kilos in 2018 and is projected to develop to 92.three kilos this yr.

It’s unsure how a lot the resumption of poultry exports to China will divert from the present U.S. provide. Stockpiled frozen poultry and beef merchandise have been nearing a file final yr in cold-storage warehouses throughout the nation due to elevated manufacturing and slowing demand from export tariffs.

China is at present coping with its personal outbreak in swine, which has killed hundreds of thousands of pigs and considerably lowered the availability of pork — a meat that could be very fashionable with residents within the communist nation. As shoppers in China search for different protein sources, hen might develop into an more and more extra attractive possibility if the outbreak lingers. It’s potential the outbreak was the first cause China determined to out of the blue raise the four-year-old ban.

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