Poultry Product Manufacturing
Description
Companies in this industry slaughter and process poultry and small game. Major companies include Koch Foods, Perdue, Pilgrim's Pride, Sanderson Farms, and Tyson Foods (all based in the US); as well as BRF and Copacol (Brazil), Charoen Pokphand Foods (Thailand), Industrias Bachoco (Mexico), and New Hope Liuhe (China).
World population growth and rising demand for protein drive revenue for the poultry industry. In 2024, the world's production of poultry is projected to amount about 140 million metric tons, up from about 115 million metric tons in 2016, according to Statista. The US, China, and Brazil are the largest producers.
The US poultry product manufacturing industry includes about 520 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $70 billion.
COMPETITIVE LANDSCAPE
Demand is driven by domestic meat consumption trends and export markets. The profitability of individual companies depends on efficient production and distribution. Big companies have economies of scale in production and distribution. Small companies can compete successfully by targeting regional markets or by producing specialized products. The US industry is highly concentrated: the 50 largest companies account for more than 90% of revenue.
Export sales are a significant source of revenue for some US processors. Unlike the US market, which values mainly the white meat of chickens, many export markets value mainly dark meat. Exports of poultry products, mainly to Mexico, Hong Kong, and Canada, account for less than 5% of US production. Imports, mainly from Canada and Chile, represented less than 5% of the US market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are young chickens, accounting for more than 50% of industry revenue, followed by processed poultry and small game (30% of the industry revenue). Other products include turkeys, hens, fowl, frozen ground meat patties, and sausage and similar products.
Chickens grown for eating (rather than laying eggs) are called broilers. In 2023, the US produced about 21 million broilers, followed by Brazil at 14.9 million broilers, according to Statista. The large producers use industrial techniques that have been developed to produce chicken products at the lowest possible cost. These involve large feeding operations - using chicken breeds that efficiently turn feed into meat - and large distribution systems that can rapidly put fresh chicken parts on supermarket shelves.
A typical chicken (or turkey) operation involves distinct steps. Chicks are produced from eggs laid by breeder flocks, which are usually owned by the processor but may be maintained on contracted breeder farms. Eggs are collected and moved to hatcheries, where they're incubated and hatched in a process that takes about 21 days. A large producer may own a dozen hatcheries. Day-old chicks are inspected, vaccinated, and transported to "grow-out" farms, where they're placed in chicken houses and fed to maturity. Males and females are segregated because they grow at different rates.
Grow-out operations are typically run by contract growers, with feed, veterinary services, and technical advice supplied by the processor. A large processor might use hundreds of contract growers in various states to supply just a few processing plants. Contract growers are paid based on the live weight of chickens they deliver, usually with a minimum guaranteed rate and various incentives. Because feed composition is critical to the rate at which chickens convert feed to body weight, processors have their own formulations and operate their own feed mills. Corn and soybean meal are the major ingredients of feeds and the largest cost of producing chickens. Feed conversion rates are close to 2.00; that is, it takes 10 pounds of feed to produce a 5-pound chicken. Chickens are fed at grow-out farms for six to eight weeks until they reach processing weight, depending on the breed. Cornish Cross Broiler pullets can attain a weight of 6 pounds in 56 days, HY-Y Broilers take a week longer to attain the same weight but have larger breasts and less fat. Some processors have developed proprietary chicken breeds.
Mature birds are trucked to processing plants that are highly automated, where they are killed, de-feathered, and chilled. The amount of further processing, such as deboning, quartering, breading, and spicing, depends on the product ordered by the customer. Final products may be ice-packed, deep chilled or frozen, whole, cutup, or boneless. Further processing may be done in cooking or smoking facilities. Products are packaged, labeled, and shipped in refrigerated trucks. Some processors have their own cold storage facilities. Waste parts like feet, heads, organs, etc. are processed into animal or pet food.
World population growth and rising demand for protein drive revenue for the poultry industry. In 2024, the world's production of poultry is projected to amount about 140 million metric tons, up from about 115 million metric tons in 2016, according to Statista. The US, China, and Brazil are the largest producers.
The US poultry product manufacturing industry includes about 520 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $70 billion.
COMPETITIVE LANDSCAPE
Demand is driven by domestic meat consumption trends and export markets. The profitability of individual companies depends on efficient production and distribution. Big companies have economies of scale in production and distribution. Small companies can compete successfully by targeting regional markets or by producing specialized products. The US industry is highly concentrated: the 50 largest companies account for more than 90% of revenue.
Export sales are a significant source of revenue for some US processors. Unlike the US market, which values mainly the white meat of chickens, many export markets value mainly dark meat. Exports of poultry products, mainly to Mexico, Hong Kong, and Canada, account for less than 5% of US production. Imports, mainly from Canada and Chile, represented less than 5% of the US market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are young chickens, accounting for more than 50% of industry revenue, followed by processed poultry and small game (30% of the industry revenue). Other products include turkeys, hens, fowl, frozen ground meat patties, and sausage and similar products.
Chickens grown for eating (rather than laying eggs) are called broilers. In 2023, the US produced about 21 million broilers, followed by Brazil at 14.9 million broilers, according to Statista. The large producers use industrial techniques that have been developed to produce chicken products at the lowest possible cost. These involve large feeding operations - using chicken breeds that efficiently turn feed into meat - and large distribution systems that can rapidly put fresh chicken parts on supermarket shelves.
A typical chicken (or turkey) operation involves distinct steps. Chicks are produced from eggs laid by breeder flocks, which are usually owned by the processor but may be maintained on contracted breeder farms. Eggs are collected and moved to hatcheries, where they're incubated and hatched in a process that takes about 21 days. A large producer may own a dozen hatcheries. Day-old chicks are inspected, vaccinated, and transported to "grow-out" farms, where they're placed in chicken houses and fed to maturity. Males and females are segregated because they grow at different rates.
Grow-out operations are typically run by contract growers, with feed, veterinary services, and technical advice supplied by the processor. A large processor might use hundreds of contract growers in various states to supply just a few processing plants. Contract growers are paid based on the live weight of chickens they deliver, usually with a minimum guaranteed rate and various incentives. Because feed composition is critical to the rate at which chickens convert feed to body weight, processors have their own formulations and operate their own feed mills. Corn and soybean meal are the major ingredients of feeds and the largest cost of producing chickens. Feed conversion rates are close to 2.00; that is, it takes 10 pounds of feed to produce a 5-pound chicken. Chickens are fed at grow-out farms for six to eight weeks until they reach processing weight, depending on the breed. Cornish Cross Broiler pullets can attain a weight of 6 pounds in 56 days, HY-Y Broilers take a week longer to attain the same weight but have larger breasts and less fat. Some processors have developed proprietary chicken breeds.
Mature birds are trucked to processing plants that are highly automated, where they are killed, de-feathered, and chilled. The amount of further processing, such as deboning, quartering, breading, and spicing, depends on the product ordered by the customer. Final products may be ice-packed, deep chilled or frozen, whole, cutup, or boneless. Further processing may be done in cooking or smoking facilities. Products are packaged, labeled, and shipped in refrigerated trucks. Some processors have their own cold storage facilities. Waste parts like feet, heads, organs, etc. are processed into animal or pet food.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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