April 15, 2004


 Trade losses from animal diseases projected to be in billions

Posted April 1, 2004

With approximately a third of the world's meat export market currently affected by animal disease outbreaks, the Food and Agriculture Organization of the United Nations is projecting losses of up to $10 billion if bans on meat and live animal imports are extended through 2004.

Twelve countries will suffer economically this year as a result of export bans or market constraints brought on by avian influenza and bovine spongiform encephalopathy, the FAO stated in a March 2 release.

The multibillion-dollar losses do not take into account the costs of public disease control measures, losses to producers and consumers, or the general costs to the poultry or cattle industries.

Headquartered in Rome, the FAO leads international efforts to defeat hunger, and serves developed and developing countries as a neutral forum to negotiate agreements and debate policy.

The economic impact on small poultry producers in Asia will be considerable, with more than 100 million birds lost so far because of avian influenza. Import bans on export-dependent countries, such as Thailand, where 25 percent of domestic flocks have been culled, will hurt small producers as local prices drop sharply.

Canada and the United States have also reported outbreaks of avian influenza in commercial flocks. Together, they account for 50 percent of world exports of poultry meat. Any prolonged ban on U.S. poultry imports—which constitute 15 percent of domestic production—will put downward pressure on all U.S. meat prices.

Several countries have also banned North American beef imports on account of BSE. The United States and Canada account for more than a quarter of global beef exports, valued at approximately $4 billion.

After reaching 1.2 million tons in 2003, U.S. beef exports are expected to drop to 100,000 tons in 2004 if bans remain in place for the entire year, the U.S. Department of Agriculture estimated.

The FAO expects the bans on poultry and beef imports will increase demand for pork. For instance, shortages of beef and chicken in Japan led to a 40 percent increase in pork prices in February.

Chinese poultry exports are forecast to decline by 20 percent this year in response to bird flu outbreaks. Poultry imports to China are expected to decline by 25 percent because of a downturn in poultry consumption and export bans on countries affected by avian influenza.

Consumption patterns in countries not directly affected by avian influenza are also shifting. For instance, chicken meat prices in India have dropped by a third, fueled by the Asia-wide concern over the disease.