Competition in the U.S. Chicken Sector
Submitted on May 20, 2010 (Original item from 2010)
Farmed Animals | Factory Farming
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Short Description:
A study of the state the chicken industry by the National Chicken Council concludes that it is a "competitive and thriving sector" with "intense competition among chicken companies [that] leads to product innovation and lower prices for consumers." The chicken industry is largely vertically integrated, in which a single company owns all phases of the operation; 75% of "broiler" chicken farmers are satisfied with their decision to get into the industry.
Abstract:
In this industry, producer-processor profit margins are modest but volatile, and innovation goes more to prices than profits. However, according to this industry-funded study, the longevity of smaller firms suggest that they are viable and competitive with the larger firms in the industry.
Chicken prices have declined relative to consumer prices and other competitive meats. With respect to white meat chicken, industry innovation has led to increased yields, higher production and lower relative prices.
The chicken industry is vertically integrated and this appears to be a successful, cost competitive method of production and marketing. Companies around the world are vertically integrated to compete more efficiently.
Contracting practices reduces the financial risk for growers, eliminating variances due to changes in broiler prices and feed costs. However, grower contracting terms are a potential area of conflict between buyers and sellers.
Spot Check Number:
1377
Sponsor:
National Chicken Council
Animal Type:
Poultry
Record Type:
Research Study
Research Method:
Unknown or Not Applicable
Geographic Region:
United States National
Number of Participants:
Unknown
Population Descriptors:
Chicken producers/processors
Year Conducted:
2010
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