- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/'US poultry a win for SA consumers' - US export council

'US poultry a win for SA consumers' - US export council

'US poultry a win for SA consumers' - US export council
Published date:
Friday, 22 April 2016
Carin Smith

"We are thrilled to be back in the South African market after about 17 years," Jim Sumner, president of the USA Poultry & Egg Export Council (USAPEEC) told Fin24 during his visit to Cape Town this week.

About 17 years ago the USAPEEC was put out of the SA market due to a complaint of dumping by the SA government and the local poultry industry at the time.

The US African Growth and Opportunity Act (Agoa), renewed by US lawmakers last year, eliminates import levies on more than 7 000 products ranging from textiles to manufactured items and benefits 39 sub-Saharan African nations. Total two-way trade between South Africa and the US was about R217bn last year.

Due to pressure from the USAPEEC via a few US senators, it was agreed in the Agoa renewal negotiations that the SA market would be open for 65 000 tonnes of US poultry imports per year.

"SA is by no means one of our largest export markets, but it is very important in terms of the signal it can give to other countries. We think it is important for SA consumers as they would otherwise be denied access to low cost, safe and wholesome products," said Sumner.

"Chicken is the best low cost protein, not against any cultural or religious norms and the US is the lowest cost producer in the world. So, it would be unfortunate to deny low income consumers in SA."

He emphasised that being low cost does not mean the product is inferior.

"The US has the highest food safety standards in the world with inspections of each bird and each flock both before and after processing," said Sumner. "This kind of testing ensures that there is never a chance that any kind of disease could get into the human food chain."

The US government also offers poultry producers an indemnification incentive to report diseases and they are reimbursed for any subsequent losses.

As for the slaughter process and processing of the poultry, Sumner emphasised it is exactly the same for products which end up in the local US market and for those exported.

"In the US we create value in the poultry industry thanks to having access to the lowest cost produced feed, being the lowest cost producer and benefiting from having the most genetic breeding companies providing more efficient conversion of feed to meat," said Sumner.

It is estimated that currently the US poultry industry uses 1.75 pounds (about 0.8kg) of feed to produce one pound (about 0.45kg) of meat. The processing industry is also highly mechanised and logistics good.

Sumner pointed out that the SA consumer market for poultry complements that of the US. American consumers mainly prefer boneless breast meat, whereas the rest of the world prefers leg meat. About 99% of the USAPEEC exports consist of leg meat.

"We export virtually no whole birds, breasts or wings. In any event, we get more for breast meat in the US so we can charge less for leg meat," he explained.

He also pointed out that the 65 000 tonne per year quota the US has in the SA poultry market, is only about 3% of the current SA poultry consumption.

"SA imports a lot more poultry from other countries apart from the US, for example," said Sumner. "On top of that EU countries can ship poultry products into SA without duties, whereas the US still pays 37% duties."

In his view, it should rather be seen as unfair on consumers that the SA government has an import duty on imported feed used by SA poultry producers.

"We promised the SA government beyond the Agoa agreement that we will work with historically disadvantaged individuals, including in the SA poultry industry, to determine how we can assist them," said Sumner. "Since we are exporting frozen chicken from the US, it also leads to job creation in SA in terms of distribution, reprocessing and repackaging."

About 50% of the 65 000 per year Agoa quota of the USAPEEC will be allocated for import by historically underprivileged South Africans.

Steve Monroe, first vice-chair of the USAPEEC board and manager of export sales at Sanderson Farms, the third largest US broiler producer, told Fin24 that the USAPEEC is happy to be back in the SA market and looks forward to partnering with historically disadvantaged people in SA for many years to come.

Read related news articles

South Africa walks a tightrope on US relations

South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...

28 March 2024

Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship

As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country.  I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...

13 March 2024

South African president Ramaphosa meets with US congressional delegation

South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...

21 February 2024

US congress receives Bill to review South Africa relations

A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...

09 February 2024

Fitch research unit expects better AGOA deal for South Africa

Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...

09 January 2024

South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities

Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...

20 November 2023

US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa

President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...

09 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]

Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...

06 November 2023

South Africa pins its hopes on an early 2024 US Congress renewal of AGOA

South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy.   This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...

05 November 2023

SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA

Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...

26 October 2023

You are here: Home/News/Article/'US poultry a win for SA consumers' - US export council