Chicken Politics

U.S. poultry exporters had their best pay period ever during the first half of the year when meat valued at $2.16 billion was shipped overseas.

Measured in volume, 1.77 million metric tons were exported during the first six months of the year, a 10 percent increase over the first half of 2010 and the third-highest six-month level on record.

But the poultry industry isn’t out dancing and celebrating. Shippers fear if steps aren’t taken, the picture next year will swing just as dramatically in the other direction.

Exports were up this year despite precipitous drops in the traditional top two markets, Russia and China. After domestic production rose in Russia and Chinese, officials imposed separate and heavy anti-dumping and countervailing duties. Mexico became the top U.S. export market.

Now politics threatens that market as well. Last month, Mexican officials began hearings into whether U.S. producers are dumping chicken meat at unfair prices.

Mexico is the fifth country in recent years to make charges of dumping. Three countries have added retaliatory duties to the price of U.S. poultry. That has already cost the U.S. industry hundreds of millions of dollars.

What has the official U.S. reaction been? In 2009, the U.S. Trade Representative’s Office released a statement that it was “disappointed” by China’s action.

However, the Obama administration has not followed up its disappointment with an official protest to the World Trade Organization in any of the cases.

“We’ve had a proliferation of the anti-dumping charges, because our government has not stepped up to the plate and challenged the actions at the WTO,” said James H. Sumner, president of the U.S. Poultry and Egg Export Council. “That encourages other countries to do the same thing.”

Simply put, China’s anti-dumping charges mean the U.S. is “dumping” chicken there at prices below what it sells for in the U.S. in order to gain market share. As evidence, China pointed to the price of U.S. chicken paws. But in fact, chicken paws sell for far more in China than in the U.S., where they get hauled to the landfill. On the separate counterveiling duties, China says the U.S. poultry industry is subsidized through corn subsidy programs. Rudimentary math would show at the WTO that other U.S. programs that encourage corn use for biofuels in fact raise U.S. feed prices.

Sumner says it’s clear the cases aren’t based on fact, but on political pressure. “The U.S. government should apply a little pressure on our behalf,” he said.

You would think an administration intent on doubling exports would do just that.

Stephanie Nall is editor of Cool Cargoes. She can be contacted at stephnall@aol.com.
 

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