Chicken industry stands to benefit from a more diversified profit pool that includes both white and dark meat
Denver, CO (GLOBE NEWSWIRE) -- Evolving U.S. demographics are shifting consumer preferences from white meat chicken to dark meat, presenting the chicken industry with an opportunity to diversify its profit centers. Advances in mechanical deboning technology have allowed U.S. chicken producers to capture the emerging demand for dark meat while addressing the ever-present labor shortage, according to a new report from CoBank’s Knowledge Exchange division.
Two key and changing demographic drivers are behind the slow but steady shift in U.S. demand from white chicken meat to dark meat: age and ethnicity. Millennials are projected to surpass Baby Boomers in 2019 as the largest living adult generation in the U.S. As Baby Boomers age, their consumption of meat, including white chicken meat, is declining. Meanwhile, millennials are now hitting their stride in income, spending power and meat consumption. Their generation grew up with international dining options that often feature dark meat as the chicken ingredient of choice.
Latino and Asian populations are growing in the U.S. and dark meat chicken, rather than white meat, is typically used in the cuisines of their cultures. As these populations continue to grow in the U.S., so will the demand for dark meat chicken.
“The shifting consumer demand is driving a corresponding increase in the value of dark meat and the decline in white meat value,” said Will Sawyer, animal protein economist with CoBank. “Since 2000, chicken breast’s share of the value of the bird has dropped from 66% to just 45%, while the value of chicken legs has increased dark meat’s share from 12% to near 30%.”
Advances in whole leg deboning technology have improved yields with half of the labor required of hand deboning. In the face of increasing labor costs and decreasing availability of labor, mechanical alternatives are now financially viable. Chicken processing costs grew approximately 15% in the last decade and continue to grow, largely driven by labor costs that typically account for half the total processing cost. As a result, Sawyer said adoption of this new technology is likely to expand further.
“These trends are helping dark meat grow as an additional profit center for U.S. producers,” said Sawyer. “A more diversified profit pool including both white and dark meat will help the U.S. chicken industry weather volatility in feed costs, consumer demand and trade.”
The full report, “Evolving U.S. Demographics Give Chicken a New Leg to Stand On,” is available at cobank.com.
CoBank is a $139 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.
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