The chicken sector is likely to be a major beneficiary of an economic upswing.

A recent report by FarmEcon LLC, a Carmel, Ind.-based agricultural and food industry consulting firm, notes that although shopper demand for poultry—especially in supermarkets—remains solid, a strong economy generating more discretionary income will likely lead to an uptake in average per capita chicken consumption.

Such activity would be in line with historical trends.

The 2007 through 2009 period—when per capita chicken consumption dropped a combined six pounds—was the first time there has been three consecutive years of declines since the U.S. Department of Agriculture first released consumption data for broiler chickens in 1935.

The report, Consumers Demand For Chicken, presented by Farm Econ President Thomas E. Elam in July at the National Chicken Council’s Chicken Marketing Seminar in Carlsbad, Calif., reveals that the recent drop in consumption was the result of reduced real consumer income, a stepped-up savings rate, and added production costs that led to higher prices for some chicken products.

Slippage may also be related to the demise of the Atkins diet boom and health concerns emanating from the 2005 H5N1 avian influenza global epidemic.

The rate of consumption also correlates with how the price of chicken compares to beef, pork, turkey and other meats, the report notes.

Yet, while recent chicken consumption levels have dropped, the underlying demand structure remains—and the sector is ripe for expansion.

The report, for instance, predicts that the launch by merchandisers of more innovative, value-added products would likely enable chicken to penetrate new markets.

A slowdown over the last few years in the rollout of processed items may have contributed to the market slowdown, the report adds.

The FarmEcon LLC report is available at the Chicken Marketing Seminar 2009 Website at rhodeislandred.chickenusa.org/CMS09.

William Roenigk is senior vice president and chief economist for the Washington, D.C.-based National Chicken Council.