Thursday, October 25, 2012

Exports key challenge for US poultry industry


    Expanding export markets will be a key challenge for the U.S. poultry industry going forward, according to panelists at the National Chicken Council's 58th annual conference outlook panel.
    See video of the panel here.
    Companies need to market their exports more effectively, according to panelist Paul Fox, CEO of O.K. Foods. “I think that it used to be that you’d think about commodity industries, and ultimately it was always the company that had the lowest costs that was able to most effectively pass cost increases into pricing and to maintain profits in difficult environments," said Fox. "I think that today it’s a different scenario in that it’s the commodities … that can be exported that you have the opportunity to pass on some cost inflation in your pricing. I think that exports are really fundamental for our industry. I think that we have to divorce ourselves from the notion of thinking that the commodity department and the export department are one and the same.”
    Panelist Michael Popowycz, vice chairman and chief financial officer of Case Foods, said large areas like China and India will be key to market expansion. "We need to have other countries open up their trade borders," he said. "We’re going to need some government help to get that accomplished. We need to continue to work with emerging countries in sub-Sahara Africa and the Middle East. I think exports is one area we all believe the industry can really grow.”
    At the end of the panel, each member was asked what he would take away from the meeting, and each had words of wisdom for the poultry industry. "We’re going to experience bumps in the road," said Fox. "At the end of the day, the market’s always right, even though it may not appear to be the case in the short term."
    Panelist Thomas Hensley, president of Fieldale Farms, said he sees an industry pattern that needs to be kept in check. "Those who don’t pay attention to history are doomed to repeat it," said Hensley. "2010 was a good year for chickens — production increase. In 2011 we were hit with high feed costs. It was bad. 2012 was a good year for chickens. 2013 — high feed costs. I think the industry needs to balance supply with demand."
    Finally, Popowycz spoke about innovation. "We have an industry that's very innovative," he said. "We need to figure out how we can make money at $7 corn and $400 meal."
    See videos of the entire panel here.

No comments:

Post a Comment