Economic Tidbits

Talking Hides and Paws

People usually think beef, corn, and soybeans when Nebraska agricultural exports are mentioned. And rightfully so, these goods typically make up the state’s top three exports. However, Nebraska’s agricultural export mix contains a diverse set of products, two of which are byproducts of the state’s livestock sector—cattle hides and chicken paws (feet).

Nebraska typically ranks in the top two states in exports of hides and hides are generally one of the top ten agricultural products exported from Nebraska. According to USDA Economic Research Service, exports of hides in 2019 equaled $135.5 million. Hide exports reached a high of $383 million in 2013 but have steadily declined since. The high cost of hides relative to leather alternatives and a shift away from leather for shoes, car seats, and clothing were thought to be the reason for the decline.

The tide (or hide) has turned this year. Through June, U.S. exports of hides are up 28 percent. And, according to the Daily Livestock Report (DLR), in the eight months prior to May, whole cattle hides exported have passed two million pieces five times. The reason for the increase, China. China is the largest purchaser of hides, purchasing more than half of U.S. exports, and has stepped up its purchases in recent months. The DLR reports that through April of this year, hide purchases by China are up 53 percent, representing just under 60 percent of total U.S. exports. The export surge has helped pull the value of cattle byproducts higher, meaning more value for cattle producers.

Chicken paws are the new kid on Nebraska’s export block. Nebraska did not have major chicken processing facility prior to the construction of the Costco and Lincoln Premium Poultry (LPP) facility in Fremont. With this facility, Nebraska has added a new export product—chicken paws. While chicken paws are not in great demand in the U.S., there is a demand overseas particularly in China. U.S. chicken paws are valued by the hotel/restaurant sectors and processors in China due to their large size and high quality. The U.S. Foreign Agricultural Service (FAS) reports that in the first half of 2021, Chinese imports of U.S. chicken paws exceeded 100,000 metric tons, a 200 percent increase from last year. The FAS projects China will import 225,000 metric tons of chicken paws for the entire year.

The LPP facility in Fremont is reportedly able to process more than 2 million birds per week when operating at full capacity. If the plant operates 50 weeks per year, it could produce 10,000 metric tons of chicken paws. If all this product were exported to China, it would equate to 4.4 percent of China’s total imports this year. Not bad for the newest product in Nebraska’s export mix.

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