Growing hunger for Brazilian chicken as bird flu spreads

The bird flu outbreak sweeping across Asia and Europe means you may soon be eating more Brazilian chicken.

The world’s top exporter has been untouched by the highly contagious virus that led to widespread culling of birds – more than 30 million in South Korea alone. After some key importing nations banned poultry from infected countries, Brazil is expected to see further demand for its products.

The avian influenza outbreak is also good news for other virus-free nations that can fill the supply gap, such as the U.S., which is the second-biggest exporter and mostly evaded contamination since cases escalated in October. Because migrating wild birds carry the disease, there’s a risk that it will keep spreading, Societe Generale SA said in a report earlier this month.

“The global situation has worsened since mid-December,” said Nan-Dirk Mulder, an analyst at Rabobank International in Utrecht, Netherlands. “Countries like Brazil and the U.S. will indeed capture market share from European Union in international markets.”

Even without the current crisis, Brazil’s chicken exports will climb as much as 5 percent to 4.6 million metric tons this year, according to the Brazil Animal Protein Association, or ABPA. The country has never been hit by bird flu and overtook the U.S. as the top poultry shipper a decade ago.

Demand may rise from nations that banned imports or culled birds to contain the virus, such as China and parts of the EU, which are among Brazil’s key customers. European nations killed more than 1.5 million poultry since Oct. 19 and the figure may more than double, the World Organization for Animal Health, or OIE, said this month.

In an effort to contain the disease, France last week widened its order to cull birds in the southwest, where about two-thirds of the country’s foie gras is produced.

About half the cases of the highly pathogenic H5N8 strain found across Europe since October were in poultry and the rest in wild birds, the OIE said. Poultry exports from EU, the largest exporter after Brazil and the U.S., totaled 1.4 billion euros (USD1.5 billion) in the first nine months of 2016, Rabobank said.

Recent outbreaks haven’t been as bad as in previous years. About 16.8 million birds were culled globally because of highly-pathogenic strains in 2016, almost half the amount a year earlier, the OIE estimates. While human infections with the virus are rare, some strains have been know to result in deaths.

How the top exporters fare depends on how they get through the rest of winter, when bird flu is at its worst. While Brazil has remained immune, the U.S. has struggled in the past and this month found a case in Montana. In 2015, the worst outbreak in American history killed 48 million birds, reduced poultry-product exports and cost the federal government almost $1 billion.

“An outbreak in the U.S. would completely change the game,” said Ricardo Santin, a vice president at Brazil’s ABPA. “There is plenty of room for Brazil to increase exports even if the U.S. remains unaffected. They are more competitive than us in chicken legs, but they don’t access the market as well as we do.”

South Korea has been hit hardest, culling about one-fifth its chickens. China, South Africa and Hong Kong are among countries that banned imports from parts of Europe, while Chile reported its first outbreak in more than a decade. In Brazil, top poultry exporters suspended factory visits to avoid contamination after the government raised its bird flu alert status in December.

“It’s really important for us to preserve our sanitarian status,” said Francisco Turra, head of ABPA. “It wouldn’t be a surprise if we double exports to some particular countries” if Brazil stays free of the disease, he said.  Manisha Jha, Gerson Freitas Jr. and Isis Almeida, Bloomberg