Chicken feet, a food pretty much ignored by Americans, is a delicacy in China. Now Sanderson Farms Inc. is hoping it can once again send the treat East following a four-year ban.
The third-largest U.S. chicken producer used to ship a lot of wing tips and chicken feet, also known as paws, to China. But the Asian country banned U.S. poultry in 2015 due to an outbreak of highly pathogenic avian influenza, costing Sanderson about $50 million a year in gross pre-tax profit.
Now, amid record low chicken prices in the U.S., a glimmer of hope may be appearing. Poultry is among the commodities “on the table’’ in trade talks between the U.S. and China, Agriculture Secretary Sonny Perdue said during an event in Illinois on Saturday.
Poultry “certainly has been discussed in a very positive way,” Perdue said, with one idea being making any ban regional rather than nationwide.
Nearly all nationwide bans following the outbreak have been lifted except for China. Lifting the so-called AI ban would mean “China is wide open” again for sales of chicken paws, Chief Operating Officer Lampkin Butts said after Sanderson reported a fiscal-first quarter loss that was smaller than the average expected by analysts.
“They need to lift the A.I. ban,” Butts said in a telephone interview on Tuesday.
Reopening the market could also open up the potential for exports of dark meat such as leg quarters, he said. China wasn’t a huge market for leg quarters before the ban and usually scooped up supplies largely when prices fell below 25 cents a pound, he said.
“That could change, and we’ve always been hopeful that it would because of a large population base, the emerging middle class,” Butts said. “If per capita consumption of chicken would increase there, that could be a huge market for U.S. poultry.”
Chicken prices in China have risen in recent months, given that it’s a competing meat for pork at a time when the Asia country’s hog herds have been culled due to African swine fever, Erin Borror, an economist for the U.S. Meat Export Federation, said at the U.S. Department of Agriculture’s outlook forum last week. A drop in China’s pork supply may be partly offset by less consumption and greater imports of the meat as well as greater purchases from overseas of competing proteins, including poultry and beef.
Other commodities that have been discussed during the talks with China include beef, corn, ethanol, dried distiller grains with solubles, sorghum and rice, Perdue said Saturday. Any potential exports are dependent on a deal between the two countries, he said. China and the U.S. have expressed optimism in recent days that substantial progress is being made toward ending their trade war.
“It’s been many years since we’ve shipped any poultry meat to China,” Chief Executive Officer Joe Sanderson Jr. said in the telephone interview. “We appreciate that it’s part of the negotiations.”
Even before the ban, U.S. exports to China had slid after the Asian country placed duties on American poultry in 2010.
The duties were lifted a year ago but the ban remained intact. U.S. poultry exports to China fell to 237,300 metric tons equaling about $315.4 million in 2014, down from a peak of 797,161 tons valued at $721.9 million in 2008, according to data compiled by the USA Poultry & Egg Export Council.