Comprehensive Broiler Supply Chain Model with Vertical and Horizontal Linkages: Impact of US–China Trade War and USMCA

Abstract

This paper builds a comprehensive supply chain model of the US broiler industry that accounts for corn and soybean meal, feed mills, breeders, hatcheries, grow-out farms, broiler processing, value-added processing, and international trade. The model is calibrated and simulated to analyze the effects of (1) corn and soybeans tariffs imposed by China and (2) change in the Canadian tariff-rate quota proposed under US–Mexico–Canada–Agreement. The first scenario indicates that feed price falls while supply increases, which decreases the production costs of breeders and grow-out farms. The second scenario shows that exports to Canada rise at the expense of exports to Mexico.

The Influence of Sino-US Trade Friction on U.S. Soybean Export

“…They analyzed the impact of Chinese tariffs on corn and soybeans. The analysis shows that feed prices have fallen while supply has increased, which has reduced production costs for breeders and growing farms [10].…”

Growth, innovation, and policy for chicken in Latin America 1961–2019

“…federal, state, and municipal officials)—all the more necessary given the noteworthy decentralization of production, and thereby attract new investors. Strengthening measures to promote continuous improvement of sanitary conditions at all stages of the value chain, and thereby prevent devastating disruptions from disease outbreaks. Renewed efforts to improve productivity in the cultivation of maize to reduce imports of animal feed—currently 22% of total annual supply, even as domestic output increased by over 15 million t between 2005 and 2016 (FAO, 2021)—while lowering costs of broiler production and local FCRs, as well as reducing exposure to volatility in international commodity markets. This is a task made more difficult with the outbreak of the US–China trade dispute in 2018 that drove down the price of maize and soybean in the US (Unveren & Luckstead, 2020). Additionally, global warming and climate change require a reorientation of rain‐fed production away from hybrid to native varieties accompanied by more farmer‐based seed systems (Ureta et al, 2020).…”

“…Given the imperative of maintaining the quality of their breeding lines, in Mexico these firms typically only sell their pedigree stock to companies of sufficient size to ensure continuous high‐volume sales, giving priority to the largest integrators that account for over half of broiler production. However, mirroring practices by dominant firms in the US (Leonard, 2014; Unveren & Luckstead, 2020), these arrangements heightened concerns about farmers and the terms of their growing‐out arrangements with large integrators—except where growers’ associations offered protection against the imposition of lower prices. Alternatively, small farmers acquired DOCs from less sanitary informal sources, albeit in a minor percentage of cases(Centeno Bautista et al, 2007; OECD, 2018).…”

“…However, the most recent near‐stagnant (1.1% decline) average consumer price coincided with imports of 3.6 million t of maize valued at USD 720 million and 238,000 DOCs worth USD 11 million in 2017–2019 (Table 3), complicated by the 16% spike in the price of soybean cake in 2017 (Becerra, 2018), all suggest rising costs, thereby continued financial weakness of broiler producer‐processor industry leaders reportedly leading to their possible acquisition by Tyson Foods (Castillo et al, 2017; ¿San Fernando en proceso de venta?, 2017). In light of Chile's recent exports of chicken to the US (Unveren & Luckstead, 2020), Peru's private poultry (integrators’) association—the AVA — has teamed up with the government's National Agricultural Sanitation Service with a view to certifying certain growing areas as avian disease‐free over the coming four years in order to help develop export markets (Contreras Flores, 2019).…”

A multi-period multi-modal stochastic supply chain model under COVID pandemic: A poultry industry case study in Mississippi

“…Their proposed model showed that customer demands are largely dependent on the selling price and the expiration date. Unveren & Luckstead (2020) proposed a simulation model for analyzing the US broiler industry under corn and soybeans tariff imposed by China and the variation of the Canadian tariff-rate quota proposed by Mexico–Canada–Agreement. To make the appropriate decisions about bio-poultry-mass supply and product distribution, Balaman & Selim (2014) developed a mixed integer linear programming model to optimize the locations of biogas plants and biomass storages in order to have an effective poultry supply chain network.…”