Currently, one of the greatest challenges for chicken processors is keeping up with demand. According to the U.S. Department of Agriculture, broiler head produced was down 4 percent in the first quarter of 2021, and pounds produced declined 3 percent.
“Production began picking back up in the beginning of April, and there should be about a 3.3 percent increase in Q2 vs. a year ago,” says Tom Super, Washington, D.C.-based National Chicken Council’s senior vice president of communications. “Supply is somewhat tight, but the sky certainly isn’t falling, and production seems to be ramping back up as we head into summer.”
With restaurants opening back up as restrictions begin to lift, chicken processors also have adjusted their product lines and supply chains to get back to a more normal retail vs. foodservice mix. In turn, the two most in-demand cuts are boneless/skinless breast and wings. “’Chicken sandwich wars’ have led to an increase in demand for breast meat, and growing wing demand has proven to be pandemic proof,” Super says.
“If you think about it, restaurants like wing joints and pizza places were built around takeout and delivery, so they didn’t have to change their business model that much during the pandemic,” he explains. “Wings travel well and hold up during delivery conditions. Plus, they aligned with consumer desire for comfort food during the pandemic.”
With chicken wing demand high, producers also have a very tight supply of the cut. Chicken producers currently are working to overcome the devastating impact of the winter storm on Texas and nearby states – major chicken producing regions. That weather event also took place in February, right after the biggest event of the year for wings: the Super Bowl.
“It will take time and effort to eventually replace the impacted hatchery supply flocks in that region, but supply should catch back up to demand soon,” Super explains. “So as high as demand is for wings right now, even small gaps in the supply of wings can cause big fluctuations in price.”
Additionally, some fertility problems with roosters have been reported in the past several months that has led to some minor production issues that are making their way through the pipeline.
The industry produces tens of billions of wings annually, and producers are working diligently to meet the upsurge in consumer demand by adding millions more. As chicken production begins to resume back to a more normal output in the coming months and a better supply/demand ratio develops, the market tightness should ease, Super says.
Additionally, each chicken only has two wings, and producers don’t raise chickens just for the wings. “They have to sell all of the other parts as well,” Super adds.
Feed prices also are always top of mind for chicken processors, and 2021 is no different. “Corn and soybeans look good enough at this time, but it’s a long time before the harvest is in the bins,” Super says.
Coupled with the challenges of meeting production demands, like most U.S. industries, chicken processors currently are grappling with a tight labor supply.
“Labor challenges are nothing new to our industry,” Super says. “Processors have been adapting to meet those challenges for years. Processing plants have been embracing more automation, offering even more competitive wage rates and attractive benefit packages, creatively managing shifts, offering flexible work schedules, and hosting job fairs, all in an effort to attract more workers.”
Additionally, chicken processors have been diligently working to keep employees safe and healthy during the pandemic through in-plant mitigation efforts. “Getting employees vaccinated has been the latest effort undertaken by the industry,” Super says.
Par Elizabeth Fuhrman (28/08/2021)
Source : provisioneronline.com
Photo : Andrey Tikhonovskiy (unsplash.com)