Md. poultry industry feels avian flu repercussions as exports fall significantly

ON THE FARM

October 22, 2006|By Ted Shelsby

Incidences of avian flu in far-flung parts of the world have taken a large bite out of Maryland's biggest farm business, poultry production.

An Asian strain of the flu, which has never been detected in the United States, has been blamed for at least 140 deaths in other parts of the world and has led to the destruction of millions of chickens overseas.

One repercussion was a significant decline in chicken exports last year, said Bill Satterfield, executive director of Delmarva Poultry Industry Inc.

"Many ill-informed foreign consumers thought they needed to stop buying chicken in order to protect themselves and their families," Satterfield said at a recent meeting of Wicomico County economic development officials.

Exports account for about 15 percent of U.S. chicken production. Although poultry processors in the region are not big participants in the export market, they felt the impact of this decline.

Citing government data, Satterfield said boneless and skinless breast, the most sought-after chicken part, sold for an average wholesale price of $1.10 a pound this month. A year ago the price was $1.25 a pound, and in April 2005, before the avian flu emerged, the price was $1.57.

Although $1.10 is not desirable, it is an improvement over this April's price of 96 cents a pound.

In an industry where profits are measured in fractions of a cent per pound, "a 60-cent difference is huge," Satterfield said.

According to the trade association, poultry companies have 14,000 employees in the three-state region. An additional 2,000 farm families raise nearly 600 million chickens a year. Their income exceeded $514 million last year.

Poultry is the top product in Maryland agriculture, accounting for about 35 percent of the state's $565 million in farm sales during 2005.

Poultry sales have a ripple effect throughout every county. About 80 percent of the corn and soybeans grown in Maryland goes to poultry companies and for use in chicken feed, according to state agriculture officials.

The flu scare comes at a time when poultry companies -- nationally and in the Delmarva region -- also are concerned about the increased use of corn in the production of ethanol. The U.S. Department of Agriculture has estimated that 20 percent of this year's corn harvest will be used in the production of the gasoline extender or alternative.

As the number of ethanol plants increases, the corn market could develop into a feed-versus-fuel situation, Satterfield said.

Despite the cloud hanging over the industry, Satterfield said, people will continue to eat chicken.

"The chicken industry has its challenges, and we have good years and bad years, but we produce a product that everyone needs -- food," he said.

Agriculture outlook

A preview of Maryland agriculture in the coming year will take place Nov. 8, when the University of Maryland's Center for Agricultural and Natural Resource Center holds its 10th annual agriculture outlook and policy conference.

Key issues to be discussed include:

Prospects for a 2007 farm bill to replace the current one, which expires next year.

In-depth information and analysis on the situation facing Maryland's grain and dairy producers.

Updates on biofuels and conservation and environmental issues involving state and federal policies.

Scheduled speakers include:

Kevin McNew, president of Cash Grain Bids Inc., a commodity research firm and a former agricultural economist with the University of Maryland, College Park.

Bob Young, chief economist of the American Farm Bureau.

Chris Galen, senior vice president of the National Milk Producers Federation.

The conference will be held from 8:30 a.m. to 3:30 p.m. at the U.S. Department of Agriculture's Beltsville Agricultural Research Center.

The cost is $25, which includes lunch. The registration deadline is Nov. 1.

Information and registration: Laoura Maratou at LMaratou@arec.umd.edu.

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