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Fragile as an egg

April 28, 2004
U.S. poultry business crows at annual show, while Asians suffer with the flu
When the International Poultry Exhibition was held in late January, avian influenza was an Asia-only issue. But even before the discovery of U.S. cases, speakers at the Atlanta show were concerned over the fragility of the poultry industry in America and the world's love affair with chicken.

"Hopefully, what's happened in recent weeks will be a wakeup call for all of us," Gordon Butland, global industry specialist-poultry with investment firm Rabobank International, said in one of the educational sessions at the show. And at the time he was speaking only of the outbreaks of bird flu in Asia, primarily Thailand, China and Vietnam. Butland had no idea how prophetic his words were.

In the following weeks, the disease would decimate poultry stocks in 10 Asian nations, where at least 18 people would die from contact with sick birds. The situation put a sizable dent in production from the affected countries, and could conceivably wipe out an entire generation of chickens. Thailand, one of the most affected countries, was just becoming an export powerhouse capable of challenging the U.S. and Brazil in export markets. "I think Thailand lost more market share in one week than it gained in five years," Butland said.

Then a different strain appeared in flocks in Delaware. Although government agencies here and abroad told consumers there was no risk of contracting the disease from eating cooked chicken, sales plummeted.

More critical was the effect on international trade. At first the Asian exporters were banned from many buying countries, which only stepped up demands on the U.S. poultry industry. Then many countries slammed the door on U.S. chicken.

"Companies are being asked what they knew when and why didn't they report the situation earlier," Butland continued, again speaking of the earliest cases in Asia. "Let's hope it is handled as well as the appearance of a single case of BSE [bovine spongiform encephalopathy, or mad cow] was handled in the United States."

Despite the sudden crisis, the chicken and egg businesses have been on a roll for a while. Per capita chicken consumption passed up beef consumption in the U.S. in the mid-1980s and has been on a steady increase ever since (see table). In addition to having the highest consumption in the world, America also is the most efficient producer of chickens, said Don Dalton, president of the U.S. Poultry and Egg Association, making it the leading exporter of both commodity birds and of value-added chicken products.

Annual Meat Consumption
















Pounds per capita. Source: USDA

Butland predicted an annual growth rate of 3 percent for the next few years, but said suddenly growing demand from India could push growth higher.

Dalton also noted the egg business is at an all-time high. Supply is just barely keeping up with demand, which has grown due to the popularity of the Atkins diet and the resolution of the debate over whether egg cholesterol is good or bad (it's good). Egg prices are rising and could jump steeply if production is cut due to animal welfare issues. One of the current issues facing the U.S. egg business is giving more space per laying hen.

Some of the success of the U.S. poultry industry is due to the tightly integrated nature of the business. The top five companies--Tyson, Pilgrim's Pride, Gold Kist, Perdue and Wayne Farms--probably control more than 50 percent of overall production. And they control it in very vertical ways: by contracting with poultry farms, supplying the chicks, supplying the feed, trucking the birds to processing centers and delivering the products to market. Most also make higher-value chicken products.

"Probably the top issues right now are environmental/waste control, animal welfare, growing export markets, and developing more chicken products," says Dalton.

Add food safety and physical security to that list, says Butland. He says limiting access to henhouses will provide not only security against bioterrorist threats, but also against the spread of diseases such as bird flu.

Again, what happened in the following weeks only drove home his point.

While avian influenza was popping up only in Asia, it was a concern for attendees at the International Poultry Exhibition in Atlanta. Two weeks later the disease appeared in the U.S.

Some news from the show floor:

* Kerry Ingredients, Beloit, Wis., introduced a whole-wheat breading product , Wheat Net Carb Coating System -- that had 75 percent fewer carbohydrates (6 grams of "net carbs" per 4-oz. serving) than more refined products.

* A similar result, but using soy instead of whole wheat, was achieved by Solae Co., St. Louis.

* The Cryovac div., Duncan, S.C., of Sealed Air Corp. showed the 8604 dual lane infeed custom conveyor, designed for easy clean-up, and the 8800E rotary chamber automatic vacuum packaging machine, an all-in-one bag loading, vacuumizing and sealing machine suitable for loading further processed poultry products into Cryovac taped bags.

* Tomco Equipment Co., Loganville, Ga., displayed a new pathogen management system that creates its own hypochlorous acid on-site by mixing carbon dioxide, water and chlorine.

* BOC Gases, Murray Hill, N.J., chose to kill pathogens using ozone and ultraviolet light systems.

* Praxair, Burr Ridge, Ill., launched the ColdFront brand of cryogenic freezers, which company officials claim has characteristics superior to traditional mechanical technologies.

* Astaris, while not an exhibitor at the show, nonetheless had representatives in town pushing Nutrifos 100, a sodium-free phosphate with a multitude of uses in poultry processing, including a reduction in the loss of flavor-containing juices during the thawing process.

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