US poultry sector bouncing back

The US poultry industry is bouncing back to profitability as fast-food restaurants are promoting chicken dishes, and the increasing beef prices persuades consumers to opt for a lower priced source of protein.

Supermarket sales of chicken have been robust, with record high beef prices pushing shoppers toward lower-cost alternatives, Tyson Foods and Sanderson Farms have said.

The industry is also facing a respite from the increasing feed costs, which now appear to be lowering thanks to expected large US corn and soybean crops.

A recent USDA report shows benchmark breast prices up 36% from a year ago and poultry companies are expecting healthy profits this year, a sharp turnaround from two years ago when the industry was hurt by the recession and high feed prices.

Chicken companies are boosting production in response to the prosperity. The US Agriculture Department predicts a 2% increase this year from 2012 and a 3% increase in 2014.

No. 4 US producer Sanderson Farms said it has returned to full production this month at its nine plants for the first time since 2011. Tyson Foods said it tries to balance supply with “forecasted demand.”

Fast food restaurants have also helped drive the US chicken industry’s resurgence, with new products such as McDonalds Inc’s chicken McWraps and Wendy’s flatbread chicken sandwich. Last week, McDonalds’ said its US sales in May were up 2.4% from a year ago due in part to its “wide range of chicken options.”