For the past 20 years or so poultry demand has been shooting skyward like a Mark McGwire home run. Chicken has become a mainstay to consumers and the foodservice industry, leaving pork to play catch-up.

Poultry demand’s climb began in the early 1980s, largely due to the industry’s ability to develop new products, and the public’s growing diet concerns. Since that time, domestic consumption of chicken has more than doubled, while beef consumption dropped by a third and pork consumption increased by about 15 percent.

The National Chicken Council conducted a survey to identify reasons why consumers purchase chicken. Versatility, convenience and health top the list.

“Chicken fits people’s lifestyle today,” says Richard Lobb, spokesperson for the National Chicken Council. “It’s a great convenience food.”

Many consumers value these qualities, considering that in 1999 Americans consumed about 78 pounds of chicken per capita. That’s compared to 53 pounds of pork and 68 pounds of beef.

Last year marked a record one-year increase in chicken consumption, up from 72.6 pounds per capita in 1998. This upward trend is expected to continue with this year’s projection at 81 pounds per capita and 2001 at 84 pounds, according to Lobb.

Broiler demand has risen every year since 1992, and has been on the upswing since 1984. Last year, broiler demand rose more than 8 percent over 1998. However, retail breast meat prices were down 17 percent, according to Glenn Grimes, University of Missouri agricultural economist. This suggests the possibility of an inelastic demand curve.

“Retail price of chicken hasn’t played that much of a role in demand the past year,” says Gary Lohr, owner of Lohr and Associates, a consulting firm in Greely, Colo. “It has been driven by consumer choice and the strong U.S. economy.”

One reason chicken prices were low is the low prices of beef and pork, according to Lobb. Abundant supplies and low prices in one meat complex can pull the others down with them in order to compete for sales.

“People are eating more meat and poultry than ever, at 227 pounds per capita in 1999,” says Lobb. “The market is pretty saturated with meat. Chicken, beef and pork are all fighting for a share of the consumer dollar.”

Lower chicken prices make it a more attractive alternative to consumers, which is bad news for pork.

The fast-food drive-through has played nearly as big a role in chicken’s popularity as the meat case. According to a National Chicken Council study, 46 percent of U.S. chicken purchases occur at restaurants and other foodservice outlets. Fast food accounts for 60 percent of that portion, which is more than one quarter of the U.S. chicken production.

“Suppliers have been putting a lot of effort into adapting product to fit foodservice needs,” says Lohr. “Foodservice has been the primary reason poultry production has increased. They’ve been willing to pay poultry producers a price above the cost of production.”

Chicken export markets are strong, with 16 percent of the U.S. product sold to other countries. That number is down slightly after the Russian economic collapse in 1998. Russia was chicken’s top export market, but that distinction now belongs to China. As the Asian economy strengthens, look for chicken exports to increase as well.

One advantage chicken has over pork and beef is the broiler industry’s fully integrated structure. Chicken integrators can control production numbers to coordinate with processing capacity. The integrated
structure also leads to better quality control.

In the poultry chain, processing capacity determines production, which in turn is set by consumer demand. In this system consumers “pull” product onto the market, rather than producers “pushing” product onto the market. That’s the type of supply chain the pork industry is trying to move closer to with efforts like a national cooperative.

That doesn’t mean total vertical integration has to occur to transform the supply chain into one where the consumer pulls product onto the market. But all parts of the pork chain will have to be more coordinated to prevent producing more hogs than packers can kill, while still filling consumers’ demand for pork. Everyone along the chain needs to make a consistent profit for the system to be feasible.

Chicken is already the consumer leader. Being able to replicate part of its supply chain to provide a more consistent, quality supply would make up one more step in pork’s race for the consumer dollar.