U.S. to suspend AGOA benefits to South Africa

On Nov. 9 President Obama sent notifications to Congress and to South Africa indicating that he intends to suspend benefits to South African agricultural products under the African Growth and Opportunity Act (AGOA) for failure to meet the eligibility requirements of the Act.
"While progress has been made in several areas including the publication of the TRQ Rule by the South African Government, two substantive issues still need to be resolved based on sound science: food safety contamination and animal health certification," said National Chicken Council President Mike Brown. "Therefore, we strongly support the administration's actions to hold South Africa accountable for failure to resume import of U.S. chicken."
According to a U.S. Trade Representative press release, the President determined that South Africa is not making continual progress towards eliminating barriers to U.S. trade and investment, including the importation of U.S. chicken. The President said he intends to take action 60 days after the notification to suspend benefits to the agricultural sector, unless South Africa meets certain benchmarks to eliminate barriers to U.S. poultry, pork, and beef. This determination is the product of an "out-of-cycle" review of South Africa that was mandated by Congress in Trade Preferences Extension Act of 2015.
"This should send a clear message to South Africa and their poultry industry that they will not be given a 'Get out of jail free' card every time AGOA rounds the turn to pass 'Go.' It makes no sense for the United States to give special preferences to countries that treat our trade unfairly," Brown continued.
The President's announcement comes after the completion of an out-of-cycle review of South Africa's AGOA eligibility. U.S Senators Johnny Isakson (R-Ga.) and Chris Coons (D-Del.) secured language in this year's AGOA reauthorization requiring this review after pressuring the South African government for nearly a year to end the anti-dumping duties on U.S. poultry. The bipartisan amendment was introduced by Isakson and co-sponsored by Carper and Sen. Mark Warner (D-Va.)
U.S. Senators Isakson (R-Ga.), Coons (D-Del.), Tom Carper (D-Del.) and David Perdue (R-Ga.) issued a statement after Obama's announcement saying, "It is unfortunate that this action must be taken, but South Africa has repeatedly failed to implement the deal reached this summer and missed a key deadline last month to finalize the trade protocol and health certificate for U.S. poultry. South Africa does not deserve to receive benefits under AGOA as long as they refuse to drop unfair trade policies that have effectively slammed the door on American chicken imports for over a decade. There is still time to address these issues, and we hope the President's action today spurs South Africa to open their market to American poultry immediately."
NCC President Brown concluded, "This issue is not resolved until U.S. chicken products have unimpeded access to the South African consumer as we agreed to in Paris in June. I would prefer that the out-of-cycle review of AGOA benefits for South Africa be completed favorably. But, without resolution to the U.S. chicken issue, I do not believe that is possible."

South Africa has failed to meet deadline for resuming poultry imports

U.S. Senators Johnny Isakson, R-Ga., Tom Carper, D-Del., and Chris Coons, D-Del., have expressed concern after South Africa missed an Oct. 15 deadline to finalize parts of the U.S.-South Africa agreement reached in Paris earlier this year. They urged South Africa to act immediately to allow U.S. poultry exports to South Africa to resume.
A settlement was reached in the longstanding poultry dispute between the United States and South Africa on June 8, during negotiations in Paris led by the United States Trade Representative (USTR), the Department of State, U.S. Ambassador to South Africa Patrick Gaspard and trade experts from the industry. The agreement was welcome news for the entire U.S. poultry industry, including the large poultry operations in the senators’ home states of Georgia and Delaware.
Since the settlement was reached, South Africa has been slow to fulfill the obligations agreed to in Paris, hindering the successful implementation of the agreement. Last month, Senators Isakson and Coons, both members of the Senate Foreign Relations Committee, called on the South African President to act quickly to address the unresolved issues in the agreement. According to the Paris agreement, by Oct. 15, 2015, South Africa should have issued both a trade protocol for avian influenza and a health certificate for U.S. poultry. Despite assurances by high-ranking South African officials, they have not met the set deadline. The U.S. has insisted that South Africa follow World Organization for Animal Health (OIE) guidelines to use a regional approach for avian influenza, but South Africa continues to resist that approach. Differences also remain on the health certificate.
“We are concerned that South Africa has not followed through on its promise to address key issues by October 15, preventing full implementation of the deal,” said the senators. “South Africa failed to finalize both the trade protocol and health certificate for U.S. poultry despite the Administration’s intense engagement with South Africa over the past year to resolve these issues. We believe this inaction must be factored into the out-of-cycle review of South Africa's AGOA eligibility and urge the Administration to take appropriate action. South Africa must take the necessary steps to resolve outstanding barriers to U.S. poultry immediately if its AGOA benefits are to be preserved. Hardworking poultry farmers in our home states and across the country should not have to wait any longer to participate in the South African market.”
The senators have pressured the South African government for more than a year to end the antidumping duties on U.S. poultry. Most recently, the African Growth and Opportunity Act included language introduced by Isakson and co-sponsored by Sens. Tom Carper, D-Del., and Mark Warner, D-Va., that would put pressure on South Africa to remove unfair limits on American poultry imports. The bipartisan amendment would require the USTR to conduct an out-of-cycle review of South Africa’s trade practices, specifically antidumping duties on U.S. poultry. The senators look forward to seeing South Africa resolve this issue so they can focus on other important areas of collaboration.
Isakson and Coons are the co-chairs of the Senate Chicken Caucus, of which Carper is a member. Both of their states have large poultry industries and are major exporters of poultry. The poultry industry annually contributes over $15.1 billion to the Georgia economy, including farmers, processing, and allied industries. Delaware’s poultry industry supports more than 14,000 jobs and contributes more than $4.6 billion to the state’s economy, according to the National Chicken Council.

Senate Finance Committee votes to hold South Africa accountable for blocking U.S. chicken

The United States Senate Committee on Finance earlier has approved unanimously by voice vote language that would put pressure on South Africa to remove unfair limits on American chicken imports. The bipartisan amendment, sponsored by Senator Johnny Isakson (R-Ga.) and cosponsored by Senators Tom Carper (D-Del.) and Mark Warner (D-Va.), would require the president conduct an out-of-cycle review of South Africa within 30 days of enactment of African Growth Opportunity Act (AGOA), a trade agreement between the United States and sub-Saharan African countries.
"I want to thank Senator Isakson for spearheading this issue in the Finance Committee, along with Senators Carper and Warner for their support," said National Chicken Council President Mike Brown. "Together with Senator Chris Coons (D-Del.), who helped craft the amendment, this issue of huge importance to U.S. chicken producers has been kept on the front burner in Congress."
In 2000, about the same time that South Africa began imposing unfair and punitive antidumping duties on U.S. chicken, Congress passed AGOA, which gave preferential market access and lower import duties to about 35 African countries, including South Africa. The bill that passed out of committee today renews AGOA for 10 years and includes Senator Isakson's amendment. It now moves to the full Senate for consideration.
"Our industry supported AGOA," added Brown. "But, for the past 15 years while South Africa benefitted from preferential duties under AGOA, it has simultaneously and unfairly excluded our chicken from its market. In our view, South Africa's unfair and protectionist practices must be addressed before Congress would be justified in extending the AGOA program. Today's bipartisan action by the Finance Committee puts us one step closer to achieving that reality."
Brown continued, "This should send a clear message to South Africa and their poultry industry that they will not be given a 'Get out of jail free' card every time AGOA rounds the turn to pass 'Go.' It makes no sense for the United States to give special preferences to countries that treat our trade unfairly."
Last month, 13 senators wrote to the South African government to express their concern about the lack of progress being made in negotiations between the South African and American poultry industries
Under the current law, the U.S. government's only option for punishing an African country that fails to live up to the trade standards outlined in AGOA is the complete termination of benefits for that country. The reauthorization legislation for AGOA passed today gives the United States the option to selectively limit or temporarily suspend benefits without having to terminate them completely. This gives the United States the upper hand in trade negotiations, further protecting American businesses, according to a press release from Senator Isakson. 

South Africa's RCL Foods relies less on frozen chicken sales

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  Andrea Gantz

  RCL Foods is shifting away from frozen chicken sales and relying more on smaller birds.

  From WATTAgNet:
  South African company RCL Foods has significantly reduced its reliance on low-profit frozen chicken by producing smaller birds that can be sold at higher prices to restaurants.
  Individually quick frozen (IQF) chicken products, sold to supermarkets, yield thin margins for domestic poultry producers, partly thanks to what the industry sees as "dumped" imports of cheap portions, the company said. Poultry producers make more money selling to fast-food chains, though they can only supply those customers with smaller birds that fit specific weight requirements.
  RCL Foods CEO Miles Dally said February 18 that his company, which produces poultry under its Rainbow Chicken brand, had reduced IQF volumes by about 40 percent by ensuring its birds were the right size.
  IQF now makes up less than 25 percent of Rainbow’s total volumes of about 5-million birds a week. Dally said RCL was producing lower volumes and smaller chickens, but with higher margins. "We’ve made massive strides" in terms of margins, he said.
  Margins in IQF would improve if import tariffs became effective and when the government enforced caps on the amount of brine water that can be injected into frozen chicken, Dally said.
  "We took a decision a while ago to cap our injection at a level that we thought was appropriate. We haven’t even felt the benefit of that yet, so we’ve had to try to do other things while we wait for the government to enforce this cap that they’ve agreed to," said Dally.

US senators urge South Africa president to drop poultry ban

U.S. Sens. Chris Coons, D-Del., and Johnny Isakson, R-Ga., cautioned South African President Jacob Zuma that continued refusal to eliminate unfair duties on U.S. poultry could jeopardize South Africa’s continued eligibility for trade benefits available under the African Growth and Opportunity Act (AGOA) in a letter sent December 9. Congress will consider reauthorization of AGOA in 2015.
“The antidumping duties South Africa has levied on U.S. poultry have been in place for fourteen years, effectively blocking our companies from accessing your market,” the senators wrote in a letter to Zuma. “We understand that our trade officials recently discussed the ongoing negotiations regarding poultry, as well as other market access issues for other U.S. exports to South Africa. We strongly encourage you to pursue solutions expeditiously that guarantee market access for U.S. poultry.”
The United States has worked directly with the government of South Africa for years in attempt to remove the duties levied on U.S. poultry. In 2013, the World Trade Organization ruled against an almost identical system of duties imposed on American chicken by China, deeming it a violation of global trade rules.
“As you know, Congress is in the process of considering reauthorization of the African Growth and Opportunity Act,” the senators wrote. “We urge you to ensure that conversations continue to make progress towards eliminating the antidumping duties on U.S. poultry and that this issue is resolved before Congress takes up AGOA reauthorization, which could be early next year. We will need to reconsider the extension of duty preferences under AGOA for South Africa if this situation is not resolved.”
The African Growth and Opportunity Act has served as the cornerstone of the U.S. commercial relationship with Africa since its enactment in 2000, successfully expanding U.S. trade with African countries that show a commitment to good governance and democratic principles. It has improved the trade environment both for U.S. and African businesses, and has spurred significant economic growth.
Sen. Coons chairs the Senate Foreign Relations Subcommittee on African Affairs. Senator Isakson is a member of the Senate Finance Committee, which will have jurisdiction over the AGOA reauthorization bill. The two co-founded the bipartisan Senate Chicken Caucus in 2013.

Performance potential of Arbor Acres birds in the spotlight at South African roadshow

Achieving the performance and genetic potential of the Arbor Acres Plus breeder and broiler in the local market was high on the agenda at a recent customer roadshow organized by Arbor Acres South Africa.  Attendees at the annual event were shown what can be achieved with Arbor Acres by a number of international and local technical specialists, who are available for customers to optimize their performance and secure the genetic potential available from the industry's leading breeding company.
The event attracted 75 people in total, including hatchery and broiler managers from Chubby Chick Breeder, Supreme Breeder, Sovereign Foods Breeder and Botswana Breeders.
Aviagen's Mohsen Ganjaei, technical services manager for Arbor Acres in the Middle East and Africa, explained how to increase chick numbers with good production persistency while Eddie van Lierde, incubation specialist, demonstrated why it is important to keep your broiler eggs and chicks comfortable, and explained how it is done.
Dr. Zoltán Marton, Aviagen veterinarian within its Global Veterinary Team, who provides veterinary advice and support to Arbor Acres customers throughout the Middle East, Africa and Russia and Eastern Europe regions, also gave an overview of osteoarthritis, beak necrosis and anti-parasitic drugs.
Ganjaei said: "We were delighted that so many PS customers attended the roadshow and that we were able to provide useful and relevant insights and technical knowledge to support them. This meeting tackled some difficult topics but also showed the levels of flock performance that is possible with the Arbor Acres birds. The key theme throughout was that modern genetics require modern management and I believe our customers found this very useful."
Puzant Dakessian, Arbor Acres commercial manager for the region, added: "The popularity and success of Arbor Acres in Africa has been on the rise in the last year and this event provided an excellent opportunity to discuss a variety of issues with PS customers in the region. We've seen broiler performance increasing significantly in the last few years with regard to feed conversion and body weight, with feed conversion improving on average by 2 to 3 points annually and body weight by 50 grams. Further performance increases will be witnessed in the years to come."

Ross Turkey, Middle East Africa association meeting in Cape Town South Africa

South Africa is the largest poultry market on a continent of just more than 1 billion people with an average per capita consumption rate of 4 kilograms, less than one-third of the global average. Cape Town proved to be an excellent location to have a meeting for the Ross distributors and to consider current trends and review regional market opportunities in the future.
The meeting commenced with an Aviagen review which highlighted investment and growth in some of the larger poultry markets globally.  Population growth, poultry demand and consumption in Turkey, Middle East and Africa (TMEA) were identified and assessed along with regional company investments to meet the growth and compete against imported product.  Although poultry meat prices have risen steadily since 2007, it is still the cheapest mainstream meat in most markets, giving local fresh and frozen product an opportunity to compete and help internal country development.  Bench marking highlighted that the regional Ross product performance was very similar to the recorded global average.
A presentation on health of distributor production, with particular emphasis on testing and laboratory support standards to allow more inter-company movement of parent stock was well supported by a subsequent presentation on a number of widely spread regional diseases, effective vaccination programs and bio-security measures required to maintain production levels.
An interesting visual tour of the new Aviagen hatchery at Elmadag in Turkey revealed a recent addition in the long term investment strategy of the company.  A review of future support for distributors to more effectively get key messages to customers in the region was outlined in the Ross marketing strategy. The emphasis then switched to an update of world commodity markets, a look at under lying causes and the prediction that volatility will continue while the industry remains challenged to transfer these costs into higher meat prices in most markets. Under these conditions, production efficiency looms as an increasingly important factor in the management and viability of future businesses.
The following morning involved a tour of a local processing plant which demonstrated the product mix being produced by a leading company for the South African market.
The second day of the meeting opened with an in-depth review of the Middle East and African markets, which highlighted clearly production, consumption and trade are at very different stages of development in many of the individual countries in TMEA. The meeting then focused on detailed market presentations from distributors in Zambia, Saudi Arabia, Iraq, Iran and also by Aviagen Anadolu in Turkey.
"This is an important annual meeting for the Ross regional team and our distributor partners as we review business and product performance in TMEA, assess the opportunities that lie ahead and share experiences and best practices.  The interaction and feedback is always beneficial to us all," commented John Maguire, sales manager, Ross Middle East and Africa.

South African egg producer seminar to be held late September

The United Nation's Food and Agriculture Organization (FAO) and International Egg Commission (IEC) are co-hosting a two day seminar in Lusaka, the capital city of Zambia, on September 18 and 19. Government representatives, veterinarians and egg producers from Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe are attending the seminar to discuss ways to increase egg production and consumption in the region. They will be joined by FAO experts and IEC members from the United States, Canada and Australia.
Organized by the FAO and the IEC, the Capacity Building seminar will help establish and develop national egg producer organizations and facilitate the transfer of information between national and regional egg producer organizations in the Southern African region. Sharing information about best practices, the nutritional value of eggs and how to increase production and consumption in the region will assist the development of commercial egg producers of all sizes, including small family producers.
"The aim of this seminar is to share information between all attendees, and create long-lasting working relationships. Governments and producers in these nine Southern African countries will gain valuable practical advice and support about how to increase the contribution of eggs to a healthy nutrition and food security and how producer organizations can convey these messages and assist producers with advice about egg production and disease management," said Dr. Olaf Thieme, from the FAO.
"By working together in this way, we can increase knowledge. An increase in knowledge will lead to increased understanding; with this, we hope to meet our ultimate aim of better nutrition for people living in these Southern African nations," Thieme added.
Dr. Vincent Guyonnet from the IEC said, "The IEC is holding its annual Marketing and Production Conference in Cape Town later in September; this means that over 400 representatives from egg industries around the world will be gathered in South Africa discussing the latest issues affecting the egg industry. The IEC felt that this provided an ideal opportunity to bring some of the expertise developed by IEC members around the world to the egg producers' associations in these nine Southern African nations. By partnering with the FAO, we were able to bring together both the private and public sectors dealing with egg production in these nine countries. This partnership is critical for the growth of egg production and consumption in the region."
The seminar will be structured into five interactive sessions across the two days. Attendees will have the opportunity to learn about and discuss the role eggs play in human nutrition, the global and regional shell eggs trade, egg production models and challenges, the latest trends in egg production and examples of the work carried out by egg producer organizations in different countries.