Mexico’s recent expansion of its ban on U.S. poultry after authorities confirmed a case of bird flu in Arkansas is the latest blow to exporters whose containerized shipments have steadily fallen since China and South Korea imposed their own bans months ago.
U.S. containerized poultry exports in January, December and November fell 13 percent to 42,800 twenty-foot equivalent units compared to the same period a year ago, according to PIERS, a sister brand of JOC within IHS Maritime and Trade. U.S. exports of poultry have been declining since October. The stronger U.S. dollar and reduced demand from oil-dependent countries, such as Angola and Iraq, has also tempered poultry export growth, USA Poultry and Egg Export Council President James Sumner told JOC.com
“And, with the ongoing Russian embargo, it has been a perfect storm” for exporters, he said. There are more than 30 countries that have some type of restrictions on U.S. poultry imports, ranging from bans on bird raised in certain states to quarantine requirements.
PIERS statistics from February and the months after will likely show continued export weakness, as China in January announced it would ban imports of U.S. poultry and egg products after a highly pathogenic avian influenza in backyard poultry and wild birds was detected in the Pacific Northwest. South Korea imposed a similar ban in late December.
“The reaction from China and South Korea has had a major impact on the total industry and their reactions are not justified,” Sumner said.
He hinted that the bans, particularly the one in China, which has its own avian influenza issues, might be more about protecting domestic industries rather than health concerns. Mexico’s decision on Friday to expand its ban of U.S. poultry imports to shipments from California, Missouri and Minnesota came just as there were signs that the top importer of U.S. chickens and turkey would loosen restrictions, he said.
Last week’s confirmation of the H5N2 strain of highly pathogenic avian influenza in a commerce turkey flock in Arkansas was the latest sign that the disease is spreading from migratory birds on the Mississippi River. The most recent rash of cases started on the Pacific migratory flyway, with cases first being documented in Oregon, and then Washington and California. The influenza has also been detected in birds in Minnesota and Missouri.
Although the more than 204,000 TEUs of containerized poultry exports were a fraction of the 11.9 million outbound TEUs in 2014, the refrigerated cargo has higher margins, helping carriers mitigate their generally less profitable backhauls. Maersk Line last year commanded the largest share of U.S. poultry exports, with 23 percent of the market; followed by Mediterranean Shipping Co., with 15 percent; Evergreen Line, at 6 percent; and Zim Integrated Shipping Services, with 5.5 percent.
Port of Savannah is the top gateway for outbound containerized poultry export with 42 percent of the market, equating to more than 86,000 TEUs annually. The port of New Orleans is the second-largest handler of U.S. outbound poultry shipments, at an 8.8 percent share, followed by Charleston, with an 8 percent stake, according to PIERS.
Hong Kong is the largest importer of U.S. containerized poultry, accounting for 11 percent of outbound shipments; followed by China and Angola, both at 8 percent; Taiwan, at 5 percent; and Russia, at 4.5 percent