UPDATE 3-U.S. chicken shipments to Russia face new threat

* Russia to halt use of frozen poultry Jan. 1

* U.S. ships frozen chicken to Russia

* U.S. industry contacting embassy in Moscow

* USDA says Russian ban is groundless

(Adds USTR comment)

By Bob Burgdorfer

CHICAGO, Nov 3 (BestGrowthStock) – U.S. chicken companies, which in
September resumed shipping to Russia, are facing a new
interruption in business as a Russian official said that
beginning Jan. 1 that country will stop buying frozen chicken.

The head of Russia’s consumer protection watchdog,
Rospotrebnadzor, on Wednesday told Reuters in Moscow the
country will ban sales and processing of deep-frozen poultry
meat from Jan. 1, both domestic and imported, because freezing
hurts the quality of the meat.

The U.S. Agriculture Department criticized the ban, while
the U.S. chicken industry was trying to get details on the
action.

“There is no scientific basis or food safety rationale for
this ban. Freezing is a long used, internationally accepted
method of securing the safety of food products, including
poultry and poultry products,” a USDA spokeswoman said.

A spokeswoman for the U.S. Trade Representative’s office
said the measure was an obstacle to Russia joining the World
Trade Organization, and said both U.S. farm and trade officials
had made that point to Moscow on a number of occasions.

“In that context, the United States and several other WTO
members have expressed concern regarding Russia’s planned
prohibition on use of frozen poultry and we will continue to
work bilaterally and multilaterally to resolve this issue,” the
USTR spokeswoman said.

The United States ships frozen poultry overseas and Russia
was once the largest export market for U.S. chicken.

“We just don’t know what is going on. We are working with
the U.S. embassy to try and find out what is going on,” said
Toby Moore, spokesman for the trade group USA Poultry and Egg
Export Council. “Hopefully, we can find out something today.”

Russia had banned U.S. chicken for much of the year because
of a disinfectant. It has since lifted the ban on several
plants, which switched to other disinfectants.

Moore said chicken shipments to Russia continue, and
several vessels carrying 5,000 to 8,000 tonnes have already
arrived.

Russia primarily buys chicken leg quarters, but it has been
buying less as it builds its own production.

“If Russia implements a rule that only chilled poultry
product can be marketed in the country, it would be a negative
for U.S. poultry processors, including Tyson Foods and
Sanderson Farms,” Stephens Inc analyst Farha Aslam said in a
note.

“The chilled poultry issue is an item that we will be
watching closely, but one that will likely not materially
impact chicken stocks until there are further developments,”
Aslam said.

Shares of U.S. chicken producers were mixed on Wednesday
morning with top producer Tyson Foods Inc (TSN.N: ) up 11 cents,
or 0.72 percent, at $15.38, No. 2 producer Pilgrim’s Pride Corp
(PPC.N: ) down 9 cents, or 1.3 percent, at $6.62, and No. 4
producer Sanderson Farms Inc (SAFM.O: ) up $1.78, or 4.2 percent,
at $44.40.

No. 3 chicken producer Perdue Farms is privately held.
(Reporting by Bob Burgdorfer; Editing by Marguerita Choy)

UPDATE 3-U.S. chicken shipments to Russia face new threat