The fallout from the standoff between Russia and NATO in Georgia is now affecting global poultry markets, with Russia banning imports from 19 US poultry plants.
Russian prime minister Vladimir Putin has announced that imports from 19 US chicken plants will be banned, after it claimed the US producers had ignored warnings from Russian inspectors who examined poultry companies in 2007. It was also reported that another 29 US plants would receive warnings.
Russia is the biggest market for US poultry. In 2007 exports of US poultry, mainly frozen chicken leg quarters, and other meat products to Russia totalled nearly $1bn (£0.54bn).
This adds pressure to an already beleaguered US sector that has seen several plant closures. Pilgrims pride was the latest us company to announce closures in an attempt to return to profitability.
The company announced that its chicken processing plant in Clinton, Arkansas, and its further processing facility in Bossier City, Louisiana, are to become idle. The company had already closed a plant in North Carolina and seven distribution centres as well as consolidated its tray-pack operations.
Pilgrims Pride attributed the action to soaring feed costs and the continued imbalance in supply and demand in the US chicken industry. This imbalance has led to prices of chicken breast being 23% lower than the five-year average for August and 40% lower than the same time four years ago.
Another factor is the diversion of corn (maize) from animal feed into ethanol. The National Chicken Council estimates that higher feed prices due largely to the ethanol programme have cost the broiler chicken industry more than $6bn (£3.13bn) since October 2006.