UPDATE 2-USDA to buy up to $14 mln of chicken to trim glut

* USDA says will help producers facing glut, lower prices

* Loss of Russian export market has led to stocks glut

* Chicken to go to food banks, government meal programs

* Some dark meat chicken stocks up 21 pct from year ago

(Adds industry comment)

WASHINGTON/CHICAGO, June 15 (BestGrowthStock) – The U.S.
Agriculture Department plans to buy as much as $14 million
worth of dark meat chicken products to help producers facing a
glut in stocks and decreasing prices, Agriculture Secretary Tom
Vilsack said on Tuesday.

The U.S. chicken industry lost its top export market for
dark chicken meat in January when Russia blocked imports due to
concerns about a routine chlorine wash used by U.S.
processors.

The idea to buy the chicken for U.S. food programs arose
during discussions between the USDA and the National Chicken
Council (NCC) about the Russia situation, the NCC said.

In a note on Tuesday, the NCC thanked the USDA for the
purchase.

Russian and U.S. officials have held a series of
negotiations to lift the ban, which has hurt exports from major
producers like Tyson Foods Inc (TSN.N: ) and Sanderson Farms Inc
(SAFM.O: ).

The USDA reported there were 90.59 million pounds (41.1
million kilograms) of dark meat chicken leg quarters in storage
as of April 30, a 21 percent increase from 74.713 million
pounds a year ago. The leg quarters are a key export item.

“American consumers prefer white meat, and while they also
eat plenty of dark meat, they cannot consume all that is
produced, considering that the chicken is nearly half dark meat
by weight,” an NCC statement said.

The government purchase, which will be used by food banks,
school lunch programs, and other food assistance programs, will
be helpful, but producers need Russia to return to the market
to pare stocks, an analyst said.

“Every bit helps but what they (chicken producers) need is
for Russia to buy 100,000 tons,” said Paul Aho, an economist at
Poultry Perspective.

That quantity of chicken would cost about $100 million at
current market prices, Aho said.

Investment Research

(Reporting by Roberta Rampton in Washington and Bob Burgdorfer
in Chicago; Editing by Marguerita Choy and Sofina Mirza-Reid)

UPDATE 2-USDA to buy up to $14 mln of chicken to trim glut