MILWAUKEE (AP) -- The nation's chicken producers faced more bad news Thursday as Russia said that 19 U.S. poultry producers will be barred from exporting their products there, a move that would deprive them access to a key market.
Meat producers are already grappling with high costs for grain and fuel and an oversupply of meat that is keeping prices down. They're focusing on exports, which are seen as key to offsetting domestic weakness and they're benefiting because of the weak U.S. dollar.
Russia is an important market for many poultry producers, including the nation's largest chicken producer, Pilgrim's Pride Inc., as well as Sanderson Farms Inc. and Tyson Foods Inc., the world's largest meat company.
Shares of many meat producers, including top hog producer Smithfield Foods Inc., tumbled Thursday on worries about potential cuts by Russia to chicken and pork import quotas. On Wednesday, Russia's top agriculture official was quoted as saying import quotas could be cut by hundreds of thousands of tons, with that country's producers making up the shortfall.
On Thursday, Prime Minister Vladimir Putin, said 19 U.S. poultry producers will be barred from exporting their products to Russia. Putin, the country's former president, told CNN that the unidentified American producers had ignored warnings from Russian inspectors who examined poultry companies last year. He said the move had nothing to do with tension over the recent war in Georgia and was purely economic.
The U.S. industry's trade group that focuses on exports wasn't so sure.
"We try and keep our industry out of politics and into marketing opportunities, but sometimes it's very difficult to separate the two," said Jim Sumner, president of the U.S.A. Poultry & Egg Export Council.
