the blog of the guy who wrote

that book about china

Following up on yesterday’s post, some new information…

My earlier suggestion that “cultural differences” play a role in the chicken trade was not far from the mark, but chicken feet are only a part of the equation. Actually, about half of all chicken exported out of the U.S. involves “leg quarters,” and something else I did not know: U.S., Canada, and Britain are the only primary economies where white meat is more popular than dark.

Chickens are normally heavy on dark meat, but growers in the U.S. breed chickens so that they have more white meat. Today, about 52% of our birds are white meat by weight. As a result of the imbalance between demand for white and dark, a surprising 30%+ of all dark meat chicken produced in the U.S. is exported.

One of the reasons that I highlight this new (to me) data is to back up yesterday’s assertion that it will be tough for China to prove “dumping” when there is a value differential based on cultural preferences. We export dark meat — our leftovers really — for a lot more than it will bring at home. While it might look like it from abroad, this is not dumping. The prices that exporters set have to do with market forces.

There was, by the way, a dumping claim out of South Africa against the U.S. poultry industry, and the home team came out on top. Cultural preferences for dark meat was mentioned as a part of that case, and the point ought to be revisited in any future China claim, as well.

The trade situation is different than some are making it out to be. It’s not exactly that a chicken probe may be launched in response to Barack Obama’s new tire tariff. China has for a long time been interested in exporting chicken to the U.S., which requires approval from the U.S. Department of Agriculture.  USDA was apparently close to approving cooked (presumably canned) product when Congress intervened and prohibited USDA from spending money on the review process, which brought the opportunity to a halt. China took the action as a slap in the face and complained about it to WTO. All of this happened, and then came the tire deal.

Much of the information above was supplied to me by a source who prefers to remain anonymous. My source asked a good question at one point, which I will leave off with: Why should China not be allowed to ship chicken products to the U.S. when we ship so much of it to China?

admin China