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American Poultry Firms Say Russian Ban Will Have Little Impact on Their Business

August 8, 2014
chickens
  

Poultry producers say Russia's decision to ban imported U.S. meat won't lead to a glut of the product because other countries are clamoring for inexpensive meat.

Russian President Vladimir Putin said Thursday that his country would restrict imports of certain commodities in retaliation for the U.S. and other countries imposing sanctions because of the situation in Ukraine.

Poultry companies should hardly worry about the birds flooding the market and suppressing prices. U.S. poultry production is expected to be around 17.26 metric tons this year and exports are expected to account for nearly 20 percent of production, said Brett Stuart, co-founder of the Denver-based market analytical firm Global AgriTrends. Exports of American poultry to Russia account for a relatively small amount.

"I'm not seeing a glut," Stuart said.

The nation's poultry producers said they're confident the losses to the import ban would be absorbed by other nations.

"We're disappointed about the loss of the Russian market, but don't expect the impact to be significant since the volume we ship there can be absorbed by other global markets," said Worth Sparkman, a spokesman for Springdale, Arkansas-based Tyson Foods, one of the world's largest meat processors.

Mike Cockrell, the treasurer and chief financial officer for Sanderson Farms, said other markets have emerged to handle any losses — including the countries of Angola, Mexico, the Philippines and South Korea, among others.

"The truth is, we sell chicken to hungry consumers in Russia; we don't sell to Putin," Cockrell said of the Laurel, Mississippi-based company, which is the third-largest poultry producer in the U.S. "Russia has used poultry as a political tool before, but fortunately, Russia is not significantly as big a market as they once were."

Last year, Cockrell said Sanderson Farms shipped about 87.5 million pounds of chicken to Russia — about $40 million worth — but that was just 1.5 percent of its total sales in 2013.

Still, "an 87.5 million-pound customer is a good customer, and we'll have to replace that," he said. "Chicken is still in hot demand internationally. We'll find a home for this chicken; it will just take us a little bit of time."

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RELATED TOPICS: Poultry, Marketing, Exports

 
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