An excess of dark-meat chicken on the poultry market has led the U.S. Department of Agriculture to announce that it will conduct surplus removal of chicken drumsticks and leg quarters as well as all types of turkey products.
Surplus removal generally begins when an industry is encountering a negative effect on the market, and it’s only performed when the market warrants.
“The USDA monthly report indicated a surplus of dark meats in frozen inventory,” said Bill Roenigk, senior vice president and chief economist for the National Chicken Council. “It’s been that way for a while, it did not improve and it got heavier.”
An industry sometimes encounters a more bountiful crop than normal, USDA spokesman Hakim Fobia wrote in an email. “This is typically when Surplus Removal Authority is used.”
By purchasing the surplus, the USDA will bring market balance to dark-meat chicken and turkey products, as well as benefit farmers, producers and processors, and the underprivileged.
“The processors and the family farmers who grow the chickens that supply these products are grateful for the department’s initiative,” said Tom Super, vice president of communications for the National Chicken Council. “Producers will have greater confidence in a more stable market in the months ahead.”
The surplus chicken purchased by the government will benefit needy families, the disadvantaged and homeless. The food will be distributed through a number of nutrition-assistance programs, with most of it going to food banks.
“The USDA, I would suggest, is doing this for a number of reasons,” Roenigk said. “One, they have the funds; two, they recognize the economy is improving, but it’s nowhere where it needs to be with food security - people still don’t know where their next meal will come from; three, it helps the chicken market back into better balance; four, to step in to provide stability to keep [the market] keel.”
He also suggested that the oversupply of dark meat is tied to retailers that have focused more on white breast meat throughout the year.
“It’s good because it can now benefit the needy families and recipients who don’t have much animal protein in their diet,” he said.
Money to buy the chicken comes from import duties.“Those duties go into the general fund and can be used to purchase commodities,” Roenigk said.
The product removal will include a set quantity or dollar amount, and once goals are met, the program ends. By Friday evening, the USDA had not revealed the parameters of the program, but Roenigk said $50 million had been allocated.
Worth Sparkman, spokesman for Tyson Foods Inc., said Tyson is eligible to participate in the program and “has submitted an offer, but the USDA has not yet made any awards.”
The USDA Agricultural Marketing Service purchases a variety of food each year to support the National School Lunch Program, the Summer Food Service Program, the Food Distribution Program on Indian Reservations, the Commodity Supplemental Food Program and the Emergency Food Assistance Program. The USDA also makes emergency food purchases for distribution to victims of natural disasters
Business, Pages 31 on 09/21/2013