The Stomp of the Chicken Feet

After President Obama's decision to levy tariffs on Chinese tires, chicken feet became the latest focus in the escalating U.S.-China trade war. The Chinese announced that they were considering import taxes on automotive products and chicken meat, a development that some trade experts feared could grow into a full-blown trade war in the midst of the Great Recession.

American executives expressed concern about losing what recently has become the largest export market for their chickens, one that is expanding rapidly as the Chinese population grows more affluent and consumerist. However, the executives also expressed relief Chinese importers are wanting to maintain current import levels to satisfy large consumer demand.

At a time when feed prices are high and domestic chicken sales to restaurants are down because of the recession, the Chinese market is important to the industry. Exports of American poultry totaled $4.34 billion last year, out of which, $854.3 million worth of chicken meat, less than 2 percent of total revenue by the American chicken industry was exported to China and Hong Kong. While the sum may seem miniscule, the U.S. industry emphasized that exports to China are very profitable.

About half of the chicken parts sold to China are wings and feet, which are worth only a few cents a pound in the United States. As delicacies in China, they fetch 60 cents to 80 cents a pound, a price that no other foreign market comes close to matching, according to industry experts.

China appeared to be ready to cut off imports of American chicken products in July, and American poultry producers said the issuance of import permits slowed temporarily, only to pick back up since then.

In an effort to calm Beijing's retaliatory mood, American poultry producers have emphasized that they have nothing to do with the Congressional import ban and say they do not fear competing with Chinese canned or frozen chickens.

“We believe in free and open trade and we feel our industry has a lot more to lose by being an obstructionist in trade than in supporting China’s position,” said James H. Sumner, president of the U.S.A. Poultry and Egg Export Council.

Two weeks ago, Mr. Sumner’s group and the National Chicken Council joined other American food organizations in sending a letter to Ron Kirk, the U.S. trade representative, warning that action against Chinese tires could lead to retaliation, stating that “[f]or some, the Chinese market is the difference between profitability and possible bankruptcy.”

Now that the Chinese are threatening retaliation, industry officials remain hopeful, taking into account the insatiable Chinese demand for chicken feet.