Why did the chicken cross the road? Here’s why, he was going global

October 2, 2011
Why did the chicken cross the road? Here’s why
By Kevin G. Hall | McClatchy Newspapers

WASHINGTON _ Finally some clarity to a question that long has bedeviled mankind: Why did the chicken cross the road? The answer: He was going global.

Many Americans may be surprised to learn that the humble chicken is now synonymous with international trade. In fact, 20 percent of U.S. chicken sales, by weight, go abroad.

That point was driven home on Sept. 20 when U.S. Trade Representative Ron Kirk announced he was dragging China before the World Trade Organization to dispute charges that U.S. poultry exports are sold at unfairly low prices.

The United States and China have ruffled each other’s feathers in recent years over moves by each to restrict poultry imports. But what wasn’t so clear in Kirk’s announcement is that the actual product being restricted by China was chicken feet.

Yes, chicken feet. That’s not exactly a part of the bird most Americans fight over at the dinner table, and it speaks to the globalization of the common chicken.

“We’ve always had two feet and two wings and one head on every chicken we’ve raised. It wasn’t until about a little more than 10 years ago … that the U.S. industry discovered that China was a great market for chicken feet,” said James Rice, who ran operations in China for U.S. poultry giant Tyson Foods from 2004 to 2010. “Chicken foot has a higher value than breast meat in China. It’s a prized thing. It’s considered a very yummy delicacy. It might be our garbage, but it’s their breakfast, and it’s something they like.”

There’s actually a global pecking order for who gets what after the U.S. chicken’s head has been unceremoniously lopped off.

“If you think of our everyday backyard chicken, it’s a global product," said Rice, who is now CEO in China for Dutch pastry giant CSM Foods (Shanghai) Co. Ltd. "An American chicken producer has to get the maximum price for their product, so you cut a chicken into parts and U.S. consumers only eat breast meat, so the breast is sold in the United States.”

“Legs and dark meat go to Russia, chicken feet go to China, and the wings go to Hooters, and when you get that right, you’ve maximized value for a chicken. So you need to get that chicken foot through to China,” he said.

But a year ago, China slapped unfair trade penalties on American chicken feet. That was a retaliatory strike; China is upset that congressional Democrats pulled funding for a U.S. Department of Agriculture program that would have allowed about a dozen Chinese companies to export processed chicken products to the United States. China had worked with the USDA to meet the same requirements as U.S. producers of cooked chicken and was angry that the funds were pulled following outbreaks of tainted milk and other food scandals in China.

The two countries are now engaged in what you might call a high-stakes game of _ you guessed it _ chicken. If negotiations in Geneva can’t produce a compromise, an arbitration process would begin.

Meantime, U.S. poultry exporters are effectively locked out of the lucrative Chinese market by penalties that make their product too expensive. That’s been to the benefit of Brazil, which in recent years passed the United States to become the world’s biggest poultry exporter.

If China remains closed to U.S. exports of chicken feet, it leaves U.S. exporters with little to replace a market that peaked at near $650 million just two years ago. That’s not chicken scratch, and U.S. producers will have to search for domestic sales, where it’s a buyer’s market for chicken feet.

“Here it’s worth 2 cents per pound. In China, it could be 35 cents to 45 cents or more, depending on the maximum value of the foot. The highest price in the world is China,” Rice said.

If U.S. producers are forced to sell chicken feet domestically, there are low-value uses for the feet, such as inclusion in pet food, grinding them into animal feed or “rendering” them into fats and proteins.

“That’s why the industry as a whole loses a lot by not having access to the Chinese market,” Rice said.

Almost nothing on a chicken goes to waste.

Feathers are sold to companies that grind them up because of the keratin they contain. The byproduct can be added to pet food and is even as an ingredient in making plastic products.

Innards are sold for specialty cooking.

Even the carcasses from deboned chickens have use, yielding meat that is mechanically removed in almost a paste form and sold to companies that make deli meats and sausages.

Chicken wasn’t really a staple of international trade until the end of the Cold War. Prior to that, poultry exports weren’t much to cluck about, other than a small amount shipped out as foreign aid.

“What really started it in earnest was when the Soviet Union fell in 1989,” said Toby Moore, vice president of, and spokesman for, the USA Poultry & Egg Export Council in Atlanta.

“The first (President George H.W.) Bush offered a food aid program to Russia. Part of that food aid was commodity shipments of U.S. chicken leg quarters, and the industry saw an opportunity to export parts that weren’t particularly in demand here,” Moore said. “They saw an opportunity to ship them overseas and make a little money … and chicken leg quarters were almost seen as manna from heaven. Out of that grew a thriving industry.”

In 1991, U.S. broiler exports to Russia were valued at about $10.7 million. By 2000, the value had grown to more than $305 million. In 2006, it was above $725 million.

China sales grew more recently, from a modest $95 million in 2005 to more than $239 million in 2006. By 2009 they exceeded $647 million, only to plunge amid the dispute in 2010 to $135 million.

China’s action against U.S. chicken feet affected producers across much of the U.S. Southeast, including Georgia, the nation’s leading poultry producer. Officials there are closely following the dispute with China.

Atlanta is a hub for many of the large trading companies that send chickens on their international journey. The Port of Savannah boasts the busiest poultry-export operation in the country, moving about 40 percent of all U.S. containerized exports of poultry. It handled 1.6 billion pounds of poultry during the fiscal year that ended June 30, moving more than 67,000 20-foot containers. Poultry is Savannah’s fourth-largest export product by volume, close behind fabric products, and trailing wood pulp and paper products.

Savannah’s port leaders gave the green light on Sept. 26 to spend $4.75 million on construction of additional refrigerated cargo racks for poultry that will provide even more space for stacking refrigerated shipping containers.

“Not only are we handling this commodity now, we’re creating a larger footprint and expanding our capacity to more even greater poultry exports in the future,” said Robert Morris, a spokesman for the Georgia Ports Authority.

Read more: http://www.mcclatchydc.com/2011/10/02/125887/why-did-the-chicken-cross-the.html?storylink=MI_emailed#ixzz1Zk7xtIJj