East Texas poultry industry counted in nation's ag economy

By LYNN MONTGOMERY | East Texas Edition

July 8, 2004 -- How can the East Texas agricultural industry remain competitive in the state's economical game plan?

The answers were detailed at the June 17 "State of the Agricultural Industry Summit" in Overton. Specific topics, such as the state of the forestry, beef cattle, and poultry industries, were detailed by experts.

One summit segment was the growing East Texas poultry industry. And with the recent cases of avian influenza (AI) in the region, it was one topic many attendees said they have been hearing a lot about.

Dr. John Carey, Texas A&M-College Station associate department head and Extension program leader, informed the audience of the poultry industry outlook.

He began by talking about global competitiveness, and asking who was No. 1 in broiler prices (the cost of producing one pound of product)? The answer is Brazil, with the United States ranking fourth.

"It's not what we can do in our area. We are in a global market place. It is easier to export and make it effective," Carey said.

A presented graph showed the average annual growth rate in the U.S. broiler industry, since 1975, is 4.6 percent; and it's projected to keep climbing at this rate.

One factor affecting poultry, especially in Texas, is the cases of avian influenza in the United States. Because of the AI outbreak, the U.S. poultry export trade has been affected. some countries have lifted the ban they've had on imports of U.S. poultry and poultry products, with the exception of poultry from Texas (due to the most recent cases).

Carey stated exports are an important component of the business, and other countries are willing to pay. An example would be leg quarters which provides food for those countries both economically and competitively.

"For those that buy leg quarters, it helps reduce the prices of other products (such as breast meat). There is a downward pressure on price. This helps the market have more premium products at a premium price," Carey stated.

"The market place places the demand on the market," he added.

One such demand is further processing because of the need for convenience. This may be institutional or food service products or to make cooked-at-home meals easier.

Another demand in the poultry industry is feed. Broilers eat 52.8 million tons of mixed feed per year. This feed includes about 12 million tons of soybean meal, which accounts for one-third, or 18 percent, of the U.S. soybean production.

"One in five 'beans are eaten by broilers. In addition, there is turkeys, egg layers, and speciality poultry. The demand is very deep and important," the professor stated.

Carey also points to other changes in the industry which involves how chickens are grown and how they grow.

"Each year genetic progress has continued. We have improved the growth rate by one less day per five pounds. We have also improved the feed efficiency by two points, and improved the breast meat yield by .1 percent," he added.

The country's industry is processing in excess of one million broiler birds per week per plant. The industry standard in 1992 was it took 50-plus days to grow a bird. Now it takes between 45 to 46 days.

Even though it is taking shorter days, the average weight of those birds continues to go up, according to Carey. Difference for these weights are, at one end of the spectrum, there are what is called bone-in. These birds are purchased fast-food chains (such as Kentucky Fried Chicken, Popeyes, etc.) by the pound, but sold by the piece.

At the other end of the spectrum is the increased weight of birds at processing time: from 5.2 pounds up to 7 pounds.

"The reason for the larger bird is production cost the same to move the carcass through the processing plant but you have a greater yield," Carey said.

He added plants are set up solely for further processing.

"The bottom line is broilers are getting bigger year after year and the industry is getting more and more into unknown territory."

Carey added the Texas broiler industry ranks sixth nationally, and is largely centered in East Texas. In the 2003 broiler industry, 601 million head - or 2.9 billion pounds - were produced with for a $1.031 billion value.

In the state's egg industry, which also ranks sixth nationally, 4.7 billion were produced and $310 million was value of production.

"We have had some record high prices and I would not be surprised to see the value of production go past the $500 million mark," Carey said about egg production.

Challenges affecting the industry are international competition, nutrient requirements for large broilers, food safety and animal well-being.

Carey stated environmentally, the industry is looking at the impacts of residuals. "Phosphorus (management) is big in this part of the state."

Another key topic in the poultry industry is reportable diseases, such as AI and Exotic Newcastle Disease.

Texas is approaching these challenges with educational programs, mandatory waste management plans, and new permitting requirements for farms over 125,000 birds.

"Environmentally the standard isn't changing. What's changing is the formality, such as permitting and more recordkeeping. It cost something. (Texas Cooperative) Extension is helping (producers get their farms) in compliance."

With reportable diseases, Carey stated Texas has one of the most aggressive monitoring programs in the United States. "It is voluntary but almost everybody is a player." The Texas Animal Health Commission began a poultry registration program earlier this year which helps locate flocks in cases of disease outbreak. Transporters and traders of live poultry are required to register with the TAHC.

There is also an industry-funded indemnity, cooperation with live bird markets, and a rapid planned response to initial outbreaks, with regards to diseases.

"We monitor in the area very closely. That's our philosophy, that's our approach. I still think that there is a ways to go, but it is the thing to do," he concluded.

Basically, if individual East Texas producers follow environmental and health regulations, the East Texas poultry industry will continue to grow, Carey concluded.