China Lifts Ban on U.S. Poultry Even as Farm Buys Bog Down Talks

08:54AM Nov 14, 2019
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(Bloomberg) -- China lifted its four-year-old ban on U.S. poultry shipments, a small sign of trade-deal progress at a time when agriculture purchases have become a sticking point in negotiations.

American exports to the Asian country are projected to top $1 billion annually, U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue said in a statement. Shares of chicken producer Pilgrim’s Pride Corp. jumped as much as 4.7%, and Sanderson Farms Inc. was up as much as 6.6%.

“Lifting the ban has been a top priority of the U.S. poultry industry for the past four years,” the National Chicken Council, National Turkey Federation and USA Poultry and Egg Export Council said Thursday in a statement. “This action represents a significant opportunity for U.S. chicken and turkey producers.”

At its peak, the annual value of poultry exports from the U.S. to China was $71 million for turkey and $722 million for chicken, the groups said.

A deal over poultry has been one of the areas of advanced discussions between the nations as they negotiate over a partial trade deal. Earlier this month, the U.S. Department of Agriculture said it would remove curbs on Chinese poultry shipments. Still, Chinese negotiators are resisting a proposal from American officials that it provide monthly, quarterly and annual targets for overall agricultural purchases, according to people familiar with the matter.

Major Win

The ban on American supplies is likely to be a major win for U.S. farmers and meat processors. The move comes as African swine fever is destroying the hog herd in China, the world’s biggest pork consumer. The Asian nation has quickly ramped up its meat imports to help meet a protein supply gap.

China prohibited U.S. poultry in 2015 due to an outbreak of highly pathogenic avian influenza. Nearly all other nationwide bans following the outbreak have been lifted. Before 2015, U.S. shipments were subject to anti-dumping and anti-subsidy duties.

The decision to remove the ban is very positive from JBS SA U.S. chicken unit Pilgrim’s Pride as it should add value to the whole carcass sales, JBS USA Chief Executive Officer Andre Nogueira says in a conference call with investors. China usually buy parts that have low demand in the U.S. domestic market, such as chicken feet.

 

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