China and Russia Are Snubbing American Chicken

For years, the U.S. chicken industry has boosted profits by selling white meat to Americans, who eschew darker cuts, and exporting tons of thighs, legs, and feet to China, Russia, and Mexico, where consumers are less fussy. That equation is now changing as China and Russia reduce imports and increase their domestic supplies, leaving dark meat piling up in the U.S.

Compounding the pain for producers such as Tyson Foods, Sanderson Farms, and Pilgrim’s Pride, feed costs are rising and bird prices have fallen. With production increasing as the big players jockey for position, investment bank Stephens says processors are losing an average of 12¢ on every pound they produce this year. Since last summer at least two producers, Townsends and Allen Family Foods, have filed for bankruptcy. “It’s a bloodbath out there,” says Tom Elam, president of consultancy FarmEcon in Carmel, Ind. “The industry has a real problem. Its export potential has dropped, and production is up.”