Indiana turkey processor welcomes China trade

Inside INdiana Business

Jasper-based turkey processor Farbest Foods says it’s hopeful to regain market share in China now that the country lifted restrictions on imports of US poultry. (photo courtesy of Farbest Foods)

JASPER, Ind. (Inside INdiana Business) — Indiana turkey producers and processors are celebrating China’s lifting of restrictions on U.S.- raised poultry and poultry products. Jasper-based Farbest Foods Inc. is one of those welcoming the news.

“They want our product. They need our product. And frankly, U.S. agriculture needs that market as well,” says Ryan Downes, vice president of sales for Farbest, one of the largest turkey processing companies in the country. “We’re happy to see that we’re getting back on track with a very strong trading partner.”

China announced late last week it was lifting the nearly five-year-old ban on U.S. poultry. The country blocked poultry imports from the U.S. in January 2015 after a flock of wild ducks in the Pacific Northwest tested positive for a strain of a highly pathogenic avian influenza.

The ban remained in place even though the U.S. commercial poultry flock has been free of the disease since August 2017.

The USA Poultry & Egg Export Council says at its peak, and before the ban, the annual value of turkey poultry exports from the U.S. to China was $71 million, about a third of that from Farbest Foods.

As one of the biggest exporters of turkey products in the U.S. and as the biggest turkey exporter to China, Farbest took a hit when it lost that market.

“In 2014, the year before the ban, Farbest sold about 22.5 million pounds of turkey product to China, which equated to roughly $21.5 million in revenue. So, if you do the math on those four years that’s about 112-to-115 million pounds of product that we needed to find a new home for,” says Downes.

Reopening the market to U.S. poultry meat comes as China faces an unprecedented shortage of protein after African swine fever – a fatal hog disease – decimated the country’s hog industry.

“I think that was a catalyst getting us back into the market,” explains Downes. “They’re to the point where they’re desperate for protein. And the U.S. is obviously a large source of protein and we’ve had success trading with them in the past.”

Due to China’s meat protein deficit, USAPEEC says turkey exports could generate another $100 million in sales and poultry breeding stock at least $60 million more. The trade association says potential chicken exports could be even higher, with estimates as high as $1 billion of additional exports.

Farbest has processing plants in Huntingburg and Vincennes, employing 1,400 Hoosiers, but Downes doesn’t expect staffing or production levels to change even with access to the Chinese market. But it does help provide certainty.

“It’d be tough for a company to go and expand production until we have a couple of years under our belt without any trade wars,” explains Downes. “The worst thing that a company like ours could do is go in and expand more for a certain market and then we lose that market overnight which is what happened with China in 2015.”

Ryan Downes tells Inside INdiana Business the company had to market its turkey products to other countries after losing the Chinese market.

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