Mad Cows, Sick Chickens Slash Global Meat Export Value

ROME, Italy, March 3, 2004 (ENS) - Mad cow disease and bird flu have affected one-third of global meat exports, or six million tons of meat, in just the past two months, according to a new report by the top United Nations food and agriculture agency.

With the value of the global meat and live animal trade estimated at $33 billion, world trade losses of up to $10 billion could result, if import bans extend throughout 2004.

The UN Food and Agriculture Organization (FAO) said Tuesday that trade losses will likely hit the 12 countries which are facing export bans or market constraints as a result of animal disease concerns related to avian influenza and bovine spongiform encephalopathy (BSE), commonly called mad cow disease.

While beef muscle meats like steaks and roasts are not believed to be affected by BSE, demand for U.S. and Canadian beef is down around the world. (Photo credit unknown)

In the case of BSE, countries around the world have banned beef imports from the United States and Canada, which account for more than one-quarter of global beef exports - around 1.6 million tons, valued at approximately $4 billion.

U.S. beef exports, after reaching 1.2 million tons in 2003, are expected to drop to 100,000 tons in 2004 if bans remain in place for the entire year, the U.S. Department of Agriculture estimated.

Both Canada and the United States, in addition to nine Asian countries, have reported outbreaks of bird flu. These countries account for four million tons or 50 percent of world exports of poultry meat - with the United States accounting for nearly 35 percent.

Small poultry producers in Asia are feeling the pain of the H5N1 strain of avian influenza, with over 100 million birds estimated to have died or been culled over the past two months.

Exports have stopped and local poultry prices have dropped sharply as a result of the disease, which is unprecedented in its geographic distribution, rate of spread and severity, the FAO and the World Organization for Animal Health said Saturday after an emergency regional meeting in Bangkok on bird flu control.

Hardest hit are export dependent countries such as Thailand, which has culled around 36 million birds or 25 percent of the domestic flocks, the agencies said.

While avian flu outbreaks in North America are not reported in commercial flocks, any prolonged ban on U.S. exports, which constitute 15 percent of domestic production, are expected to put downward pressure on all U.S. meat prices.

Chicken on skewers in a Japanese market (Photo by M. Griffin courtesy FAO)

Japan, heavily dependent on meat imports, is planning to resume imports of heat treated poultry from Thailand, as heat kills the bacteria that cause bird flu. Out of the $450 million of Thai poultry exported to Japan last year, approximately one quarter is reported to be in processed form. The European Union is already taking processed product from Thailand.

Meanwhile, non-traditional exporters are moving to supply Japanese import poultry demand. Both Malaysia and the Philippines will export poultry to Japan. Malaysia will export 200 to 240 tons of boneless chicken while the Philippines is expecting to ship 30,000 tons to Japan.

Brazilian exporters indicate that stronger demand for Brazilian poultry products in the wake of bird flu outbreaks would increase 2004 output by five to six percent while pushing poultry exports up by 15 percent, the FAO says.

Chinese exports are forecast to decline by 20 percent in 2004 in response to bird flu outbreaks. Meanwhile imports are expected to decline even more, down 25 percent due to a slowdown in consumption and poultry product import bans on bird flu affected suppliers, including the United States.

Even consumption patterns in those countries not directly affected by the bird flu are shifting. For example, in India, the poultry industry is reportedly losing more than $2.2 million daily due to a crash in demand for chicken and eggs. Chicken prices have dropped by one-third, as a result of concern over the disease.