Cheonggyewon Story

  1. Egg Story
  2. NEWS

NEWS

We will endeavor to show better Cheonggyewon day by day.

Bird flu redirects trade flow of U.S. chicken, egg û  2017.04.27  hit : 5,705

Bird flu redirects trade flow of U.S. chicken, eggs, grains

By Tom Polansek | CHICAGO

CHICAGO Global outbreaks of bird flu in poultry have altered the flow of U.S. chicken meat, eggs and grain around the world, adding to challenges faced by domestic exporters and giving a leg up to Brazil, which has so far escaped the disease.

Different strains of avian flu have been detected across Asia, Europe, Africa and in the United States in recent months, leading to the culling of millions of birds and a flurry of import restrictions on eggs and chicken meat.

U.S. grain traders such as Bunge Ltd and Cargill Inc [CARG.UL] have lost business because poultry deaths have reduced feed demand. Some domestic poultry producers, though, have managed to boost sales by taking advantage of trading bans that hurt rivals.

Sanderson Farms Inc, the third-largest U.S. poultry producer, said it sold more chicken to Iraq when Baghdad backed away from Europe's poultry due to bird flu, or avian influenza (AI), in the bloc.

"They've had more of a problem with AI than we have," Mike Cockrell, Sanderson's chief financial officer, said about Europe.

Iraq imported 185.6 million pounds (84.2 million kg) of U.S. chicken meat last year, about 3 percent of total U.S. chicken meat exports.

Data on chicken exports is not yet available for March, when the United States confirmed its first case of a highly lethal form of bird flu in commercial poultry in more than a year.

After the finding, South Korea, suffering its own worst-ever outbreak of bird flu, blocked U.S. poultry and eggs. That shut off opportunities for U.S. exporters hoping to make sales to cover shortfalls in South Korea, said Keithly Jones, a senior economist for the U.S. Department of Agriculture (USDA).

Last month, the USDA cut its forecast for 2017 U.S. egg exports by 6 percent to 305 million dozen because of South Korea's ban.

"We were hoping to expand our market share," Jones said, "but we came down with mild forms of avian influenza so that squashed that whole idea."

U.S. grain traders, who were grappling with a global supply glut before flocks in other countries were culled to contain bird flu, have faced lower demand for the corn and soybeans that provide feed for chickens.

Bunge, one of the world's top grain and oilseed traders, told Reuters that shipments to South Korea for February and March declined "on the back of reduced feed productions." Shipments have since been picking up, according to the company.

In March, Cargill said South Korea's outbreak, in which about 35 million birds have been culled, contributed to a decrease in quarterly earnings in its global animal nutrition unit.

'BIG WIN' FOR BRAZIL

The United States has reported only two cases of highly lethal bird flu in poultry so far this year and a handful of less-dangerous cases. U.S. officials have said the risk of the disease spreading to people is low.

Many trading partners have responded by blocking poultry from U.S. counties or states with infected flocks, rather than from the entire country. That localization of bans has kept the impact on Sanderson's chicken exports to a minimum, Cockrell said.

Still, bird flu is a headwind for the poultry sector, along with politics, cheaper oil prices that have reduced the buying power of oil-producing nations that import chicken, and strength in the U.S. dollar, which makes U.S. farm exports less attractive, Cockrell said.

One political challenge, he said, is a ban on U.S. poultry by China, which has halted imports since about 50 million birds died in the worst-ever U.S. outbreak of avian flu in 2015.

China has reported more than 160 human deaths from bird flu since October.

For Brazil, the world's top chicken exporter, recent bird flu outbreaks in other nations have been a "big win" because it is clear of the disease, said Will Sawyer, a vice-president of food and agribusiness research for Rabobank.

    Brazil's chicken exports rose 3.2 percent to 330,200 tonnes in February from a year earlier, according to industry association ABPA. They declined 4 percent in March, it said, mainly because of temporary import bans on Brazilian meat following a police probe of the country's top meatpackers.

(Additional reporting by Ana Mano in Sao Paulo; Editing by Jo Winterbottom and Matthew Lewis)