Poultry Industry Doing Well, for Now

Poultry Industry Shines, Like a Canary in a Coal Mine

By Patrick Cavanaugh, Farm News Director

 

Bill Mattos, president of the California Poultry Federation, based in Modesto, reported the state’s poultry industry is doing well despite new regulations and wage increases. “First of all,” he explained, “it looks like chicken has taken over as the [category of] highest meat consumption now in the United States. It’s getting more and more popular, so that’s good,” Mattos noted.

“Also, the best thing is the industry seems to be weathering the Highly Pathogenic Avian Flu (HPAI) A (H5N1) storm,” he continued. “In California, we’re doing our due diligence with biosecurity. We don’t have any Avian Influenza. We’ll knock on wood for that.”

California Poultry Federation logo“The industry is also enjoying lower feed costs. That’s 60% of our cost, so that’s good news,” he added.

And, poultry industry employees have job security. “It doesn’t look like there will be fewer employees in the industry over the next few years, and we’d like to have more,” he said.

Notwithstanding the good news, challenges loom on the near horizon. “The Air Quality and Water Quality Control Boards are regulating a lot of different industries,” Mattos observed. “They’re starting to look at the poultry industry now that they have completed the dairy rules. We’re very concerned about those issues, so we are trying to work with the boards to explain to them what we do and how our business runs,” noted Mattos.

The updated minimum wage requirement may hurt the California poultry industry, another big concern of Mattos. “We supply half the chicken consumed in California. The other half comes from out of state. Without the same minimum wage requirements, we’re going to be at a disadvantage. We’re looking into the different possibilities—what we can do—to offset that.”

“You will be seeing some new things coming out from the poultry industry as we look at the ramifications of the new minimum wage,” explained Mattos. “We can’t compete with that. They are going to be taking a lot more percentage away from us, which may cost us some jobs if we don’t work this out.”

“With the minimum wage hike, California lawmakers are trying to appease workers. But it really affects businesses. Ours happen to be mostly in the Central Valley, which is the hardest-pressed area for unemployment. It isn’t a good place to have to follow wage requirements like you’re seeing in San Francisco and Los Angeles. It frankly makes no sense in the Central Valley,” said Mattos.

Outlook on California Poultry

Bill Mattos: Outlook for California Poultry Industry

By Charmayne Hefley, Associate Editor

California’s poultry industry has a positive outlook for the coming year despite the recent outbreak of the highly pathogenic avian influenza plaguing the rest of the nation’s poultry industry. Bill Mattos, president of the California Poultry Federation, said the coming year will see chicken overtaking beef.

“We’re learning from a lot of economists that we are going to have an exciting year for poultry next year and into the future,” Mattos said. “It looks like chicken is taking over beef next year, and all of poultry will be ahead of the red meats. We love our beef and pork friends, but we’re passing them. It looks like the healthfulness of chicken and the capacity to grow locally—everything in California—is looking good for the poultry industry. And we’re excited. We think the chicken and turkey industries will have a good year coming up.”

And although the price of corn is still higher in California versus nationally, Mattos said this industry is still doing well. “We still pay about a dollar or more a bushel for corn in California. But prices are outstanding compared to what they were two or three years ago, so our companies are making some money.”

With the flyways, or bird migration, coming back this fall, Mattos said the California poultry industry is prepared with increased biosecurity on their farms and ranches to prevent an avian influenza outbreak. Mattos said, “It’s very important that we make sure our companies are locking down their facilities—keeping visitors off and maintaining a biosecurity that’s first in the nation—because any type of bird flu that could invade here and spread would devastate the marketplace.”

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California Poultry Federation

California Turkey Industry Enjoys Excellent Year

California Turkey Producers and Processors Offer Wide Variety to Consumers and Benefit From Steady High Prices

For the last two weeks, grocery store meat departments have been catering to consumers looking for the perfect turkey.

According to Bill Mattos, President of the Modesto-based California Poultry Federation, it has been a great year for California turkey producers:

“This is probably one of the best years for turkey in many, many years for the farmer and the processor. The consumer still gets a bargain every Thanksgiving even though prices this year are higher [as] there are less turkeys in the nation. California fresh turkey was sold out from our processors two weeks before Thanksgiving. So, we were urging everyone who wanted California fresh turkey to get their order in early, and they may still be able to do that. The California farmer is offering everything from fresh and natural to organic to free range; you can find just about everything in your supermarket. It will be a very good year for turkey, and it will be a good year for chickens coming up as well. We look forward to 2015 because we think it will be even better than 2014.”

Mattos said that the turkey industry was careful to avoid oversupply, “The turkey industry didn’t grow crazy, and prices stayed at a pretty good level. They didn’t all start growing like farmers do sometimes as they all get into the business when prices are good. Turkey farmers held back and kept their supply even; however,  with very high beef, pork and other meat prices at this time of year, people look at turkey and even chicken as a bargain.”

As we all sit around the table with friends and family this Thanksgiving, we can be thankful for the California turkey producers and processors, as well as the farmers and farm workers who provide so much for the seasonal meals.

Meat Price Trends Point to Increase in Poultry Sales

By: Ching Lee; Ag Alert

The Memorial Day weekend usually kicks off the summer grilling season, and Bill Mattos, president of the California Poultry Federation, said he expects shoppers will look more to chicken and other poultry products this year as less expensive protein alternatives to beef and pork.

“The barbecue season is a big time for chicken,” he said. “We think prices will probably go up for chicken, but not at all like we’re seeing in beef and pork.”

With the U.S. cattle herd at its lowest in more than 60 years—made worse in recent years by drought-related downsizing—and the porcine epidemic diarrhea virus lowering U.S. pork production, market analysts say poultry meats are poised to fill that market gap.

The bright outlook for poultry producers is expected to continue into 2015, as U.S. beef production is forecast to drop by nearly 6 percent this year, while pork production will also fall by as much as 7 percent, according to the Rabobank Food and Agribusiness Research and Advisory division.

William Sawyer, an analyst with Rabobank, said although overall U.S. meat consumption has declined in recent years—even before the recession—chicken consumption has stayed relatively stable and is now growing.

“That’s been largely driven by the fact that beef prices have risen significantly more than chicken has,” he said.

With the price of ground beef eclipsing that of chicken breast, Sawyer noted that fast-food restaurants such as McDonald’s are taking advantage of poultry’s lower price points by offering more new menu items featuring chicken.

Given how expensive it is to raise cattle compared to chicken in terms of feed cost, Sawyer said he expects chicken will continue to gain market share.

“Once consumers have the appetite for value, which is what we’ve seen in the growth in the chicken sector, it’s unlikely that beef is going to regain that per-capita consumption that it’s lost in the last seven or eight years,” he added.

Sawyer said consumers who buy specialty products such as organic, free-range or antibiotic-free are much less sensitive to price changes anyway, so producers who raise birds for these markets are not as impacted by current price trends in the conventional market.

Although USDA projects U.S. pork production will bounce back from the PED virus next year with a growth of 2.9 percent, beef production is expected to continue to decline, as ranchers retain their heifers in an effort to expand their herds.

That means meat prices will likely remain strong—and with lower corn prices, poultry producers will still have incentive to increase production, Sawyer said.

In addition, U.S. chicken exports, which take up 20 percent of total production, are expected to continue to grow, particularly to Mexico, and that will also help to support higher chicken prices, Sawyer said.

“So the outlook is very positive and very profitable,” he added.