October 8, 2010
US poultry industry suffers huge blow from Chinese tariffs
China's decision to levy tariffs of up to 105% on US poultry imports could have serious economic consequences for local processors and farmers.
If the new Chinese duties are not repealed, US exporters would have to pay an additional $73 million to the Chinese government for a reduced annual shipment of 80,000 tonnes of poultry to the country, costing the US broiler industry $973 million, said James Sumner, president of the USA Poultry and Egg Export Council.
About 17% of the poultry produced in the US is exported, according to Mike Lacy, professor and department head at the University of Georgia's poultry science department, making chicken one of the few bright spots in the US export industry.
"There's going to be too much supply and not enough demand. What that means for poultry farmers is that, in the near term, they will end up having to cut back, produce fewer birds, which means less money for American poultry farmers," he said.
The main bone of contention between China and the US is the large number of chicken feet shipped to Chinese shores from US processors.
Without the Chinese market, the paws simply become a byproduct of the chicken processing process with no real customer, experts say.
The impact will be primarily felt by chicken processors and exporting companies, which essentially have lost the only market for the feet, said Toby Moore, a spokesman for USA Poultry and Egg Export Council.
Gary Rhodes, a spokesman for Pilgrim's Pride, said his company was still "shipping to China," and that there would be "no impact on jobs," even though the company was levied with a 53.4% fee, according to China's Commerce Ministry.
Tyson Foods spokesman Gary Mickelson said the company would "do everything we can to continue selling chicken profitably to China, as well as seek ways to expand our poultry exports to alternative markets."
Tyson, the largest US chicken processor, was assigned a 50.3% fee on chicken products imported to China.
