Russian Threat to Cut Poultry Trade Could Cost U.S. Producers $700 Million
Feb. 22, 1996
LITTLE ROCK, Ark. (AP) _ Up to $700 million in U.S. poultry exports to Russia are at stake in a disagreement over health and sanitation.
If the dispute is not resolved, U.S. consumers could see more sales on chicken.
But poultry industry officials said Thursday that inspections by Russian veterinarians could resolve the disagreement with the largest foreign market for U.S. chicken.
Russia has given the poultry industry 30 days notice that it will stop importing chicken if its complaints regarding the health of the flocks and of substandard sanitary conditions are not addressed.
Although some shipments are still being made, no new import permits are being granted, U.S. Agriculture Secretary Dan Glickman said.
The new Russian health rules caught the U.S. government and industry by surprise.
``We sell products to 57 other countries. These are concerns that nobody else in the world has raised,'' said Tyson Foods Inc. spokesman Archie Schaffer. The Springdale, Ark.-based Tyson is the nation's largest poultry producer and accounts for much of the U.S. chicken sold to Russia.
The National Broiler Council said it expects no interruption in the flow of chicken to Russia. Last year, more than $700 million in chicken was sold to Russia, according to the council.
``The (Russian) inspectors have noted certain differences in inspection procedures and documentation between U.S. operations and the Russian industry. We will work to resolve all these issues,'' the council said in a prepared statement.
Kim Decker, marketing specialist at the North Carolina Agriculture Department, said the inspectors have been in his state.
``I suspect it has more to do with protecting the domestic markets than with problems with our processing or anything,'' Decker said.
James Sumner, president of the USA Poultry & Egg Export Council in Stone Mountain, Ga., said the Russians are miffed because U.S. exports have put Russian poultry producers out of business.
``Ours are half the price of their domestic product and superior in quality,'' Sumner said. Without a ban, Sumner estimates the industry would sell $620 million worth of chicken to Russia this year.
U.S. poultry industry officials said there are no health worries.
``Heck, no. There isn't one,'' Sumner replied when asked if there is a health threat. ``This is primarily a trade issue.''
Schaffer said Tyson sold about $150 million worth of chicken to Russia last year, less than 5 percent of its total sales but still more than any other company. He shrugged off suggestions that, if the ban goes through, prices would drop in this country.
``The product will go on the market and be sold somewhere else,'' he said.
But Decker said the market would be glutted.
``There would be a ton of product on the market and the price would drop. How that would affect the companies would depend on how strong the companies were. It could affect the growers ultimately. It's not clear how drastic that would be,'' Decker said.
Selling chicken to the Russians creates a beneficial niche for U.S. producers because Americans eat more white meat and the Russians have been buying dark meat. If the Russians insist on the ban, any glut in the market will be legs and thighs.
``There's not any contingency plans you can make. We can't grow chickens that don't have legs,'' Schaffer said.
Glickman told reporters Wednesday that U.S. officials have been visiting Russia in the hope of reaching a resolution.
He said he wrote to his Russian counterpart, Aleksandr Zaveryukha, deputy prime minister for agriculture and food, that the new rules threatened cooperation on poultry and other agricultural matters. Glickman also suggested that the rules would threaten Russia's desire to join the World Trade Organization.