Foreign doors are closing to a key U.S. export
Around 40 countries have placed restrictions on the $5.7 billion U.S. poultry business in the wake of an avian flu outbreak that has hit three states, with more possibly joining them soon.
The U.S. Department of Agriculture found the highly contagious H5N2 avian influenza virus in commercial turkey flocks in Missouri, Arkansas and Mississippi. These birds are located in the Mississippi Flyaway, a bird migration route where this flu strain had previously been seen.
According to the Centers for Disease Control and Prevention (CDC), humans have little risk from this outbreak, which began on the West Coast. Affected products include turkey and chicken meat, along with eggs, fertile hatching eggs and breeding stock.
The H5N2 avian flu virus is different than the H7N9 bird flu virus that has been connected to illnesses in humans. That virus doesn't usually affect people, but officials in China started finding infected humans in 2013.
"Most of these infections have been associated with contact with infected poultry or contaminated environments (such as poultry markets) in China," according to the CDC.
Regarding the bans on U.S. poultry, many "are self-imposed by USDA based on bilateral agreements between the U.S. and other countries," wrote Toby Moore, a spokesman for the U.S Egg & Poultry Export Council, in an email to CBS MoneyWatch. "Most restrictions are on products from affected states, and a few are limited to the affected counties. Bans normally remain in place for 90 days past the date the affected farm is cleaned and disinfected."
According to Bloomberg, Mexico, the top importer of U.S. chicken and turkey, expanded its ban to include Minnesota, the top turkey producer, along with California and Missouri. The European Union, Guatamala and Jordan have also imposed restrictions. China and South Korea banned all U.S. poultry exports after earlier bird flu outbreaks.
"Right now it's not terrible," said Jessica Sampson, an economist with the Livestock Marketing Information Council, in an interview. But she added: "The potential is there" for things to get worse.
Officials are worried that the outbreak has hit Arkansas, the heart of the U.S. poultry industry and where Tyson (TSN), the largest chicken processor, is based. No cases of avian flu have been found in flocks grown for Tyson, according to spokesman Worth Sparkman.
Along with Tyson shares, the stock prices of other companies connected to the poultry business, such as No. 2 producer Pilgrim's Pride (PPC) and Sanderson Farms (SAFM), have been fallen over the past two days because of the news. Tyson, though, rebounded a penny in Thursday trading. Sanderson CEO Joe Sanderson told CNBC that disease can be controlled with proper hygienic practices.
Butterball, the largest turkey processor, found infected birds at one of its contract farms in Arkansas and one in Missouri, according to spokeswoman Stephanie Llorente.
"At Butterball, our first concern is always the health and safety of the people who enjoy our products as well as the care and well-being of our turkey," she said.
Cargill, also a major turkey producer, found bird flu cases at one of its contract farms in Missouri, according to Mike Martin, a company spokesman.
Once the epidemic gets under control, restrictions imposed on U.S. poultry sales likely will be lifted.