US pigs out on bacon, ribs as trade wars cut chicken demand
CHICAGO: Americans are losing their taste for chicken and eating more beef and pork as President Donald Trump’s trade wars reduce US pork exports to China and Mexico and leave cheaper bacon and ribs at home.
An expansion in the number of US hogs and cattle is contributing to the change in diets by boosting supplies of pork and beef.
Restaurants are seizing on the increases to promote hamburgers instead of chicken, while grocery stores have featured pork.
The shift is hurting chicken producers, such as Tyson Foods Inc and Sanderson Farms Inc, said Bill Roenigk, an agricultural economist and consultant for the National Chicken Council trade group.
He said the chicken sector would generally lose money or break even in the fourth quarter of 2018.
Tyson on Tuesday reported quarterly sales that missed Wall Street estimates, sending its shares lower even though the company posted an overall profit.
Operating income from chicken fell nearly 34 per cent from a year earlier, while beef operating income was up about 14 per cent.
“The shift from chicken to beef and pork has been far more pronounced than anyone had imagined,” said Heather Jones, managing director for investment firm Vertical Group.
The pain for chicken producers and the increased appetite for pork are ripple effects of Trump’s trade disputes, which have also reduced shipments of US soybeans and sorghum to China.
“With all that pork on the market,” Roenigk said, “it has spilled over to affecting consumers’ demand for chicken.”
Pork prices have fallen as retaliatory duties of 62 per cent in China and up to 20 per cent in Mexico have curtailed US exports to those countries.
Kraft Heinz Co, which owns the Oscar Mayer brand, cut prices for bacon after pork belly prices declined.
Ahold Delhaize’s Food Lion and Stop & Shop grocery stores have offered deals and launched marketing campaigns for pork, said Jarrod Sutton, a vice president for the National Pork Board trade group.
Food Lion said it offers promotions based on product availability.
The US Department of Agriculture projects per capita chicken consumption will rise only about 1.2 per cent next year, compared to gains of 4.3 per cent for pork and 2.6 per cent for beef.
Promotions at restaurants such as Wendy’s Co, which is featuring a ‘S’Awesome’ hamburger with three strips of bacon, are helping fuel pork and beef demand, according to the National Cattlemen’s Beef Association, an industry group.
Wendy’s said it generally does not adjust marketing based on short-term changes in commodity prices.
Yet, quick- service restaurant chains released 54 new hamburgers through September this year, up about a third from last year, according to a survey of about 75 chains by Datassential, which analyzes menu trends.
Releases of chicken products fell 14 per cent, said Datassential, which also reported a decline in new pork dishes.
The slowdown in chicken consumption is a turnaround for meat companies.
Tyson is building a US$ 300 million plant to process 1.25 million more birds a week after struggling to keep up with chicken demand last year.
In July, the company, which also sells beef and pork, cut its 2018 profit forecast, citing uncertainty in trade policies. — Reuters