MILWAUKEE (AP) — The struggling chicken industry said Monday that it could be hurt further by news that China is investigating whether U.S. chicken products are being sold in China at below market prices.
China is the top export market for U.S. chicken, according to the USA Poultry & Egg Export Council. It primarily buys U.S. chicken feet.
On Sunday, China announced it would investigate complaints that American auto and chicken products are being dumped — or sold at below market prices — in China or benefit from government subsidies. The move came after the U.S. said Friday it is raising tariffs on Chinese-made tires.
Although only 20 percent of U.S. chicken is exported — with a value of about $5 billion — any retaliatory impact by China could hurt the industry, said Jim Sumner, president of the trade group. China overtook Russia as the top chicken export market this year, following Russia's trade spat over chicken last summer. Russia later cut its U.S. chicken imports.
The trade spat with China comes just as exports are becoming an even more important part of business for chicken producers, Sumner said.
"Our industry is operating on minimally profitable levels at this time, so this would certainly not help the industry," Sumner said.
Meat producers, particularly chicken producers, have been hurt in at least the past year as they deal with record-high feed costs. An oversupply in the market meant they couldn't raise prices fast enough to keep up with the rising costs, crimping their profit margins. Producers have been cutting production to bolster pricing and feed costs have fallen.
Sumner said China's claims that the U.S. government subsidizes chicken production is not true, and U.S. producers are not selling their products at prices lower than competitors in China.
Shares of Tyson Foods Inc. fell 26 cents, or 2 percent, to $12.49 in afternoon trading, while shares of Sanderson Farms Inc. fell 56 cents, or 1.4 percent, to $39.73.
