February 14, 2020 / 12:29 AM / 4 days ago

UPDATE 1-Coronavirus reroutes U.S. chicken shipments bound for China

(Adds Tyson statement)

By P.J. Huffstutter

CHICAGO, Feb 13 (Reuters) - Ships carrying refrigerated cargo containers of chicken from the United States to China are being diverted to ports in Hong Kong, South Korea, Taiwan and Vietnam due to the coronavirus outbreak, according to a U.S. poultry export trade group.

The virus, which is causing havoc in the global container shipping trade, is keeping consumers and workers at home in China, delaying purchases at stores and restaurants and slowing the unloading of products at ports.

Chinese ports have run out of space for refrigerated containers, which must be plugged into electrical outlets once they are offloaded to keep frozen meat and other food products cold, Jim Sumner, president of the USA Poultry & Egg Export Council, told Reuters on Thursday.

Frozen and refrigerated product is starting to spoil because of the lack of available power, a manager for a Los Angeles port terminal operator said.

The delays come as China was poised to increase U.S. beef and poultry imports after the Phase 1 trade deal announced last month.

U.S. poultry exporters are being told by freight, port and government officials that shipments of medical supplies and pork needed to bolster China's reserves are being allowed in, Sumner said.

"Everything else is being considered not a priority and is not allowed entry," he said. "China is basically shut down right now."

Tyson Foods has not redirected any of its current chicken products from their intended destinations, and has restarted all its operations, the company said in an emailed statement. "We are actively assessing what this outbreak may mean for our global business and preparing for the possibility of any impact."

Maryland-based Perdue Farms Inc told Reuters that it does have orders on the books and is monitoring the ports situation.

An estimated 300 to 400 refrigerated poultry containers - currently in transit - are being diverted. About 80% of the product are chicken feet, while the remainder is chicken meat and turkey products, Sumner said.

Beijing lifted a nearly-five year ban on U.S. poultry imports last November, driven by an unprecedented shortage of meat in China after African swine fever killed millions of pigs in the pork-loving country.

It promised to be a lucrative market, particularly for chicken feet. Typically, U.S. processors sell them to rendering plants or pet food companies for an average of 5 cents a pound, Sumner said. The average price of chicken feet sold to China is 90 cents a pound, he said.

The economic squeeze to U.S. chicken exporters could be significant, as companies can rack up storage fees on delayed shipments, Sumner said. (Reporting by P.J. Huffstutter in Chicago; Additional reporting by Lisa Baertlein in Los Angeles and Tom Polansek in Chicago; Editing by Bill Berkrot and Richard Chang)

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