May 3, 2006

 

Bird flu hits at US poultry companies
 

 

Bird flu has hit at the bottomlines of America's largest chicken producers, with its no.1 producer Tyson Foods reporting on May 1 its biggest quarterly loss in more than a decade, as concerns about bird flu and mad cow diseases hurt exports.

 

The company reported a US$127-million loss in the first quarter compared with a net profit of US$76 million in the same period a year ago.

 

A day later on May 2, the country's no.2 poultry company Pilgrim's Pride announced a Q2 loss of US$32 million--down drastically from earnings of US$56.4 million a year ago--as slow export sales and increased industry production created excess supplies that hit chicken prices. Revenue for the period was US$1.27 billion, compared with 8 percent from US$1.38 billion in Q2 2005.

 

Pilgrim's Pride, like other US meat companies, had earlier warned that results would be hurt by excess supplies partly due to the global bird flu situation, which affected US chicken exports.

 

In the face of such a situation, the company said it would reduce weekly chicken slaughter by 3 percent, reduce its planned capital investment this fiscal year by US$25 million to US$40 million, and focus further on cost reductions and efficiencies.

 

In March, the company withdrew its guidance for the quarter and fiscal year.

 

Another large chicken producer, Gold Kist, is also expected to report huge losses later this week, according to information provider Thomson Financial. Investment research company Morningstar Inc also pointed out that domestic supplies have risen dramatically as exports were affected by bird flu.

 

Announcement of these dismal results came as New Jersey reported bird flu in a chicken at a live-bird market in Camden County. Though it tested positive for a strain of bird flu, preliminary testing indicated it was not a variant of the N1 virus.

 

The USDA is in the midst of determining the strain, New Jersey agriculture officials said.

 

Bird flu has in recent months been detected in a number of European countries, including the UK, which announced last week the H7N3 bird flu virus in chickens found dead in the country.

 

The H5N1 virus has killed at least 113 people worldwide since 2004, according to the World Health Organisation.