Poultry International - June 2017 - 21
PoultryInternational ❙ 21
goal is optimization, which may lead to solutions such as
being an importer and an exporter of poultry at the same
time. Being neither an exporter nor an importer would be
a highly unlikely optimization solution.
Why internet poultry companies?
Leading poultry companies of the 21st century will
need to not only use the internet but become internet
Retail weight US per capita
consumption of young chickens
June 2017 ❙ www.WATTAgNet.com
Globalization and poultry competitiveness
U.S. chicken consumption is now 90 pounds
per capita and may never see 120 pounds per
Appropriate scale of operation for
the world, million broilers per year
Investment in new poultry production will increase
in those countries that are the most competitive and decrease in those countries that are the least competitive.
International competitiveness is not determined by performance because the technology of the world chicken
industry is trending toward convergence using best
industry practice. In other words, technology is readily
accessible on a worldwide basis.
The important issues in international competitiveness are grain supply, labor cost and local government
policies. Since feedstuffs represent the single largest
cost of live poultry production, they represent a huge
advantage to grain surplus areas and a problem for grain
deficit areas. Low labor costs also provide a significant
advantage. Grain exporting countries with low labor
costs are in a sweet spot for poultry production if the local business climate is friendly.
Assuming relatively free international trade in the future (a big assumption), there will tend to be less poultry
production in grain deficit areas and more poultry production in grain surplus areas. A concept that is likely to be
cast aside is that of self-sufficiency. A more appropriate
1950 to 80 pounds in 2000. No one should expect that
U.S. broiler consumption will continue to rise at that
rate. Consumption is now 90 pounds per capita and may
never see 120 pounds per capita.
The slowdown in the growth of mature domestic
markets will encourage poultry companies interested
in growth to develop a global marketing and production strategy. The likely strategy is expected to involve
a combination of strategic alliances and acquisitions in
other countries. There have already been changes in the
ownership of the U.S. chicken industry. JBS, a Brazilian
company, purchased Pilgrim's of the U.S., which at the
time was the largest U.S. chicken company. It can be
expected that just like global automobile companies,
global chicken companies will establish production in
several countries and market in dozens of countries.
They will be big companies; the apprporiate scale of
operation for surviving companies is likely to approach
1 billion chickens per year by 2030.
Looking forward 10 years, a firm that processes
at least 1 billion chickens per year, half the size
of Tyson Foods today, might be the minimum
size for a global poultry company.