Russia poised to prohibit imports of U.S. poultry

Md. chicken industry would feel a squeeze

March 07, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

In a move that could have an economic impact on the poultry industries in Maryland and 37 other states, Russia is set to ban the import of U.S. poultry beginning Sunday.

Last year, the United States exported more than 1.1 million metric tons of poultry - worth about $630 million - to Russia. Maryland sold more than $14.7 million worth of poultry to the Russians.

After Washington threatened to stop aiding Moscow's bid to join the World Trade Organization, however, Russia said yesterday that it may reconsider the ban.

U.S. Trade Representative Robert Zoellick said Tuesday night that the Bush administration would stop asking Congress to remove a roadblock to WTO membership unless the ban was rescinded.

Russian officials have said the case for the embargo grew out of improper labeling, the use of additives and meat coming from suppliers that do not have salmonella checks.

Russian Agriculture Minister Alexei Gordeyev said Tuesday that the ban on U.S. poultry was based on "concrete grievances about production quality," according to the Interfax news agency.

There has been speculation that the move was related to President Bush's call on Tuesday for tariffs of up to 30 percent on imported steel, including shipments from Russia. Although both countries deny any link between the two commodities, "the Russian media has tied it [the embargo] to the steel tariffs," said J. William Satterfield, executive director of the Delmarva Poultry Industry.

The decision to ban U.S. poultry doesn't reflect Russia's "political views about trade relations," Interfax quoted Russian Prime Minister Mikhail M. Kasyanov as saying yesterday. If the United States "gives positive answers to the questions of our veterinary service," the ban won't take effect.

Richard A. Lobb, a spokesman for the National Chicken Council, said yesterday that a ban would hit U.S. chicken growers and poultry processors hard. "Last year, Russia took 38 percent of the total chicken exports from the U.S.," Lobb said. "That 38 percent is 8 percent of the total U.S. production. If they take away the market for that 8 percent of total production, that's a serious matter."

As a leading poultry-producing state, Maryland stands to suffer from Russia's threat.

"Broiler production in Maryland accounts for 31.4 percent of total farm receipts. Poultry is our state's leading export commodity," Maryland Agriculture Secretary Hagner R. Mister said in a letter yesterday to members of the state's congressional delegation seeking their help in resolving the trade dispute.

Errol Small, head of international trade at the Maryland Department of Agriculture, said Russia is the state's primary market for poultry exports.

He said that 22 percent of the state's $67 million in total poultry exports - $14.74 million - last year went to Russia. Total broiler sales in Maryland were $460 million in 2001.

Both Small and Mister warned of a ripple effect that an embargo would cause throughout the state's agriculture community. Approximately 80 percent of the corn and soybeans grown in the state go into feed for the poultry industry.

Satterfield said poultry processors on the Delmarva Peninsula employ about 14,000 people. Another 2,500 families grow chickens for the processors. He said it is too soon to say if any of the companies will be forced to lay off workers if the Russian market is lost.

An embargo would also hurt the state's $42 million-a-year egg hatching industry.

Salisbury-based Perdue Farms Inc., the largest poultry processor, declined to comment on Russia's action. It referred all calls to the National Chicken Council.

Lobb said the threat of a ban stems from a meeting in January in which Sergei Dankvert, Russia's deputy minister of agriculture, promised local processors protection from U.S. chicken imports, which sell for substantially less than birds grown in Russia.

U.S. chicken exports to Russia rose slightly more than 90 percent last year to 1.1 million metric tons, according to Lobb. He said Russian processors produced less than 600,000 tons. U.S. officials have warned that a ban would place the two countries' wider economic relationship at risk. "The stakes in this issue are much bigger than just the poultry trade, though that's pretty big, too," Alexander Vershbow, the U.S. ambassador to Moscow, said this week.

"We've made it very clear to the Russian government that we consider this ban unacceptable and inconsistent with the way these kinds of questions should be dealt with," he said.

Bloomberg News and the Associated Press contributed to this article.

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