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USDA rule to allow chicken from China
By ANN HINCH
Tennessee Correspondent

WASHINGTON, D.C. — A new USDA Food Safety and Inspection Service (FSIS) rule, which took effect May 24, adds The People’s Republic of China to the list of countries approved to export certain processed poultry products to the United States.

Given the Bush Administration’s multi-billion-dollar initiative to prepare against avian influenza, one might wonder at such a rule. But economic benefits for U.S. companies may be at the root of this approval.

The rule states initially, only “fully cooked, shelf-stable” product will be imported from China. Richard Lobb, communications director for the National Chicken Council, a nonprofit trade association for the chicken industry – which has not taken a position on the rule – explained these products are mostly canned or in vacuum-sealed pouches or dried.

FSIS estimates during the first four years, imports from China will range from 1,134 to 2,835 metric tons annually – representing, at most, less than one-fifth of 1 percent of total U.S. poultry products production – then level off. (FSIS notes U.S. companies selling duck and geese products may face “short-run difficulty” from Chinese competition.)

In contrast, data from the U.S. Department of Commerce and the International Trade Commission show U.S. companies exported more than 3,796 metric tons of prepared poultry meats to China in 2003 alone. This was even down by more than half from the two previous years, though total poultry exported to China doubled between 2001 and 2003, mostly in the form of fresh/frozen chicken. Hypotheses vary why USDA would approve a rule with such small impact on the U.S. market.

“You’re not going to replace the U.S. production,” said Paul Brennan, executive vice president of the Indiana State Poultry Assoc. “You’re not going to produce poultry more effectively than we do in the U.S.”

The rule itself gives a clue by acknowledging the Chinese market “is experiencing a major growth in demand for poultry that is unlikely to abate for some time.” The July 2000 issue of Changing Times, published by the Animal and Plant Health Inspection Service (APHIS) Center for Emerging Issues, listed U.S. poultry companies with holdings in China, including Tyson Foods, Perdue Farms Inc. and Continental Grain (Wayne Farms, LLC).

“There’s billions of people there to be fed,” Brennan said. “And their population is still booming. This could be a real opportunity for our poultry industry.”

Lobb agreed, noting as countries become more affluent – as China is – their citizens tend to eat more meat and poultry. “There’s room for a lot of different players there,” he said.

In addition, FSIS notes the main prospective growth area for Chinese exports are markets in eastern Asia, not North America. Presumably, U.S. companies positioned to sell from China need only meet the health regulations of China and the importing country, not USDA.

Representatives of Tyson and Perdue stated neither company has taken a position on the new rule, nor does either plan to import poultry products for sale in the United States. Perdue spokeswoman Julie DeYoung added the company slaughters birds in China for Chinese consumption only.

Practically speaking, there is probably not a vast U.S. market for canned or pouch chicken, said F. Ann Draughon, co-director of the University of Tennessee Food Safety Center of Excellence. The flavor isn’t as good as from frozen chicken, and canned meat is just an additional step in meal preparation more easily satisfied by a finished product.

“If people buy (prepared food), they’re going to buy complete meals,” Draughon said, referring to frozen dinners or soups containing poultry. “I don’t think the average elderly person (wanting convenience) is going to buy a can of chicken.”

Though allowing China to sell a nominal amount of poultry here may open the door wider for American businesses overseas, one may still wonder why the United States has to accept any products – especially since it is such small volume.

It may be a matter of quid pro quo. Dr. Philip Paarlberg, professor and agricultural economist at Purdue University, explained.

USDA might be trying to reach an even larger market than China by making a point of trusting that a country linked to animal disease (avian flu) can still meet U.S. food standards.

“What we’re trying to do with the China case is we’re trying to show we apply the rules fairly all around, that we’d want used on our products,” he said.

For example, years ago, the U.S. banned beef from Japan because a small sample of bovine spongiform encephalopathy, or Mad Cow, was found. Japan retaliated after a case was confirmed in Washington state in 2003. Now, to protect American export trade in an increasingly global market, Paarlberg speculated USDA must show more tolerance by considering import requests such as this.

He cannot, however, predict if China will eventually gain any foothold in the U.S. market. “If I were going to be worried about anybody in the near term,” he said of poultry – or pork – I’d worry about Brazil.”

This farm news was published in the June 21, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

6/21/2006