The Future of Animal Agriculture in North America - Farm Foundation

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that of the United States and Canada. Mexico provides
limited subsidies for activities related to genetic and herd
improvements through the Agriculture Ministry’s “Alliance
with You” program. To participate, swine producers are
required to meet specific standards relating to herd health
and herd composition. At this time, no specific funding or
support programs are available to aid small hog producers
in reaching a viable scale of production through contracts
with large processors and slaughterhouses.
• Brazil offers a long-term credit program for its pork packers
through the Ministry of Science and Technology; $10
million was allocated under the program in 2003 and
2004. The program finances projects geared toward genetic
development and improvements in pork quality and
carcass yields.
Poultry Meat
North American countries accounted for 35 percent of the 60.5
mmt of world poultry meat production in 2004, down from a
high of 39 percent in 1993 (Figure 8). The main reason for the
decline was a 300 percent increase in Chinese production (to
9.9 mmt in 2004 from 2.4 mmt in 1990), and a 257 percent
increase in Brazilian production (to 8.6 mmt from 2.4 mmt).
These increases are much greater than the 76 percent increase
in poultry meat production that North America experienced
during the same period. The other leading world producer is
the EU, producing 9.7 mmt in 2004, up 62 percent or 6.0
mmt from 1990. Broiler meats account for 92 percent of world
poultry meat production, up from 89 percent in 1990.
North American countries accounted for one-third of world
poultry meat consumption in 2004 (19.4 mmt), followed by
China (9.8 mmt), EU (9.2 mmt) and Brazil (6.0 mmt).
Chinese and EU poultry meat consumption is balanced with
production. North American and Brazilian production exceeds
consumption by 1.8 mmt and 2.6 mmt, respectively. Brazil is
cost efficient in poultry production, but has limited
transportation infrastructure. It has increased poultry meat
exports by taking advantage of favorable exchange rates, disease
outbreaks in other exporting countries, sanitary negotiations
with Asian countries, and aggressive market promotion. In
2004, Brazil exported 2.6 mmt of poultry meat, while U.S.
exports were 2.5 mmt (Figures 9 and 10). EU poultry meat
exports were 2.8 mmt in 2004, however, only 1.0 mmt were to
non-EU countries. The United States has a 30 percent market
share of world poultry meat exports, Brazil has 34 percent, and
the EU, excluding intra-EU trade, has 14 percent.
North American poultry meat exports reached a peak of 2.9
mmt in 2001 and have averaged 2.5 mmt since 1996. The
United States accounted for 90 percent of total exports in 2004.
Historically, the majority of U.S. poultry exports have been
shipped to Russia, China/Hong Kong and Mexico. While
Global Competitiveness and Trade
Russia and Mexico have remained consistent markets during
the past decade, China/Hong Kong began decreasing imports
of U.S. poultry in 1999, when it was the largest market for
U.S. exports, at 591 tmt. In 2004, the United States exported
726 tmt (29 percent of its exports) to Russia; 349 tmt (14
percent) to Mexico; 129 tmt (5.2 percent) to Canada; and 128
tmt (5.1 percent) to China. This marked the first time
China/Hong Kong was not in the top three U.S. poultry export
markets. Ukraine, Turkey, Cuba, Lithuania and Japan are
important poultry meat export markets for the United States.
Poultry meat policies and trade issues include:
• Canada maintains a supply management system for poultry
production, attempting to alleviate the need for large
volumes of imports or the need to export excess supply.
Canada restricts poultry meat imports with a TRQ on
chicken meat equal to 7.5 percent of the previous
year’s production.
• Mexico also uses a TRQ for imports on chicken leg quarters,
even though other cuts are now duty-free under NAFTA.
The leg quarter TRQ is scheduled to be phased out by
2008. U.S. poultry meat exports to Mexico were also
impacted by low pathogenic avian influenza in the United
States. (Low pathogenic avian influenza is not a threat to
human health as is H5N1 avian influenza. While H5N1
has been found in Asia, Europe and Africa, no cases have
been found in North America.) Even though a temporary
ban is no longer in place, Mexico wants to increase the
diversification of its poultry meat import suppliers.
• Brazil is the major global competitor for U.S. poultry
meat and its exports have grown sixfold in nine years.
Historically, the No. 1 export market for Brazilian
poultry has been Saudi Arabia, but it has made significant
in-roads into China/Hong Kong, Japan and Russia. These
countries have traditionally relied on the United States for
the majority of their poultry meat imports. A major reason
for the increase in Brazilian poultry meat exports, in
addition to their lower cost of production of finished
product, is that the Brazilian Poultry Exporters Association
has worked to guarantee market access and reduction of
non-tariff barriers around the world, in part by negotiating
sanitary issues with Asian countries. Periodic disease
outbreaks in other exporting countries, coupled with the
cost of production advantages and a favorable exchange
rate, have provided Brazil a competitive advantage in
global markets.
• The EU, with 1.0 mmt of extra-EU exports, is the third
leading poultry meat exporter to the world market. Russia,
the Middle East, Ukraine and China/Hong Kong are the
four largest markets for extra-EU poultry meat exports. The
United States exports to all of these markets, as well. The