International Egg and Poultry Review
By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking at Mexico and Russia.
Mexico
During the week of March 21, 2005 Mexico announced an outbreak of
low pathogenic avian influenza in Durango, a state in northern Mexico.
The strain was identified as H5N2, not the highly pathogenic H5N1 in
Asia. The outbreak prompted the slaughter of approximately 2 million
chickens, a million more were placed under quarantine. The outbreak
has affected at least 31 flocks of broiler breeders and egg type layers.
According to SAGARPA, approximately 19 companies are participating
in the operation to contain the flu. The outbreak was identified as part
of Mexico’s permanent avian influenza monitoring program.
According to some, the outbreak seems to be under control with
product being placed into the food chain for consumers. Mexico
currently has 4 thousand businesses that produce 34 million chickens
a month, approximately 9% of their monthly production, has been
affected by the latest outbreak in some fashion. There are no reports
as to the source of the bird flu, but people are noting that Mexico had
recently resumed poultry imports from Texas, United States into
Secretary of Agriculture (SAGARPA) authorized processing plants.
Texas had low pathogenic avian influenza last year. Import restrictions
are currently in effect for the U.S. states of California, Connecticut,
Delaware, Maryland, Missouri, New Jersey, North Carolina,
Pennsylvania and Texas; and are ineligible from the Texas counties
of Gonzales, Guadalupe, Galdwell, Bastrop, Fayette, La Vaca, De Witt,
Karnes, Wilson, Comal and Hays. States with export restrictions are
allowed to export poultry meat and poultry products to Mexico to plants
authorized by SAGARPA for thermal treatment (cooking).
The United States Department of Agriculture (USDA) does not restrict
poultry imports due to a low pathogen bird flu outbreak. In 2004, the
United States imported 23,760 dozen shell eggs from Mexico. Mexico
also signed a free trade agreement with Japan last September that is
expected to increase egg products exports to Japan by 30% in 2005.
Some are predicting Mexico to export 9,000 tons of powdered eggs in
2005 to Japan and even more in 2006. Poultry meat exports to Japan
are expected to take time to develop before significant amounts are
exported.
Source: USDA/FAS AND VARIOUS news sources
Russia
Imported poultry prices were stable through February, 2005, while
domestic prices rose for whole birds and leg quarters. However, it is
anticipated that prices may rise this spring due to high international
prices. In early 2005, continued poor implementation of the poultry
quota and pork and beef TRQs for the second straight year
exacerbated the effect of rising world prices on the Russian market.
A brief survey of the different types of retail food outlets was done in
and around Moscow. Moscow is often used to show emerging Russian
trends. Some trends of interest include only the open air farmer’s
markets carried imported poultry other than branded whole birds in
hypermarkets. Fresh and frozen domestic poultry producers are
making aggressive steps to capture imported poultry’s last market
segment in Moscow, the low price category of the farmer’s markets.
In the past, both fresh and frozen could be bought unpackaged or in
frozen bulk sizes, now packaging is ubiquitous for frozen, even in the
farmer’s markets.
High volume producers are struggling to supply the large retailers
and are beginning to exit the farmer’s markets due lack of supply. In
2003 food retail sales were up 20%, HRI up 6% and food processing
up 5%. As a result of the high demand due in part to an increased
price gap with red meat, high domestic prices, continued investment
in production and continued new introduction of processed poultry
products, broiler production is forecast to grow 13%. In order to attract
more customers, poultry producers are diversifying production and
have recently introduced halal and kosher production methods. Many
experts believe as the balance of the country follows Moscow’s lead,
poultry and the sophistication of its business practices will shift
consumption away from pork and beef.
Russia is currently negotiating its membership into the World Trade
Organization (WTO). The WTO main partners in trade have agreed to
preserve meat quotas and the possible continuation of making quotas.
Russia plans to preserve meat import quotas until 2009. In a
proposed agreement with the U.S. to allow Russia into the WTO,
Russia would not increase meat import quotas by more than 2.5% a
year.
The poultry import quota is based on safeguard investigation. Law
provides only for an limited extension if the industry successfully claim
injury from imports. The poultry industry is anticipated to push to
convert the quota into a TRQ after it expires which will allow the
government to continue support and protect domestic producers. The
import quota for 2005 on poultry meat was unchanged in overall volume
and allocation from 2004. Russia’s poultry imports fell 4% during
2004 when compared to year ago numbers and are anticipated to
decrease 7% in 2005 due to tariff rate quota and licensing problems.
Russian government officials have also signed a document stating
that if some supplying country is banned due to an unfavorable epizootic
situation, an economic entity has the right for re-issuance of the license
for import of the same kind of goods from another country, irrespective
of the size of quota established for the country.
Sources: USDA/FAS and various news sources
To view the full report, including tables please click here
Source: USDA's Agricultural Marketing Service - 12th April 2005