Bird flu fails to hit U.S. appetite

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The poultry industry says the U.S. demand for chicken has remained strong despite a lagging export market in countries where bird flu has been reported.

"No one that we've spoken to has reported any impact from avian influenza," said Richard Lobb, spokesman for the National Chicken Council, a Washington trade group. "The public is very well aware of bird flu but there's really been no measurable impact on demand for chicken in the United States."

Overseas exports, on the other hand, took a major hit in the fall as populations in Turkey, Romania, Ukraine and other countries with confirmed cases of bird flu became averse to chicken altogether, Mr. Lobb said.

"When the domestic market in a country like that is down sharply, you can't sell the local fresh product [and] it is very difficult to sell the imported frozen product -- consumers just shy away," he said.

In response to weak sales overseas, the country's No. 2 poultry producer, Pilgrim's Pride Inc. of Pittsburg, Texas, on Wednesday said it was cutting production at its Timberville, Va., plant by 10 percent this year "to better balance production with demand," spokesman Gary Rhodes said. The cutback is part of a plan to reduce overall production by 3 percent this year.

"The exports for much of this year have been very weak and at the same time, that has led to higher inventory levels and has contributed to lower overall prices for our products," Mr. Rhodes said.

For the most recent quarter ending April 2, the company posted a net loss of $32 million (48 cents per share), compared with earnings of $56.4 million (85 cents) the previous year.

In the United States, the oversupply of chicken caused prices for both breast and leg meat to fall 30 percent during the quarter.

In a letter to affected plant employees, Pilgrim's Pride said it hopes to return to normal operations by early next year.

The production cutbacks "are absolutely necessary in order for the company to return to profitability and ensure our long-term success -- and your job security," the company said.