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Sanderson Farms, Inc. Message Board

  • hyper_inflation_is_coming hyper_inflation_is_coming Sep 18, 2009 1:20 AM Flag

    Why China won't block US chicken

    China is threatening to cut off imports of American chicken, but poultry experts have at least one reason to suspect it may be an empty threat: Many Chinese consumers would miss the scrumptious chicken feet they get from this country.


    “We have these jumbo, juicy paws the Chinese really love,” said Paul W. Aho, a poultry economist and consultant, “so I don’t think they are going to cut us off.”

    Chicken exports were thrust to the forefront of American-Chinese trade tensions on Sunday when China took steps to retaliate for President Obama’s decision to levy tariffs on Chinese tires. The Chinese announced that they were considering import taxes on automotive products and chicken meat, a development that some trade experts feared could escalate.

    American executives expressed concern about losing what recently has become the largest export market for their chickens, one that is expanding rapidly as the Chinese population grows more prosperous. But the executives also expressed relief that, so far, Chinese importers have told them to keep the feet and wings coming.

    “We were told by our customers in China to continue to pack and ship product,” said Michael D. Cockrell, chief financial officer of Sanderson Farms, a major poultry producer based in Mississippi. “It gives us a little bit of optimism that we will get over this.”

    At a time when feed prices are high and domestic chicken sales to restaurants are down because of the recession, the Chinese market is important to the industry. Exports of American poultry totaled $4.34 billion last year. Of that amount, $854.3 million worth of chicken meat (less than 2 percent of total revenue by the American chicken industry) was exported to China and Hong Kong. But industry executives said the exports to China were particularly profitable.

    About half of the chicken parts sold to China are wings and feet, which are worth only a few cents a pound in the United States. As delicacies in China, they fetch 60 cents to 80 cents a pound, a price that no other foreign market comes close to matching, according to industry experts.

 
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