TRALAC - Trade Law Centre

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

Friday, 22 April 2016 Published: | Carin Smith

Source: Fin24 (South Africa)

"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.

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