Industry Outlook | Hurricane Katrin...
Industry Outlook
Hurricane Katrina and Avian Influenza Cast Shadow Over Exports And Imports
The aftereffects of Hurricane Katrina are still unfolding. But one thing is certain — U.S. agricultural exports and imports are going to be affected and consumers are likely to feel the effects at the grocery store.
Agricultural export statistics from 2004, record that meat and livestock products exported from New Orleans were destined for El Salvador, the European Union, Guatemala, Honduras, Hong Kong, Jamaica, Mexico, Russia, Trinidad, and Turkey. Poultry and poultry products out of New Orleans went to China, Georgia, Ghana, Guatemala, Haiti, Honduras, Hong Kong, Israel, Jamaica, Romania, Russia, Sierra Leone, Turkey and Zaire.
About 70 percent of all U.S. poultry exports to Russia are shipped out of the affected ports (Mobile, Gulfport, New Orleans and Pascagoula). Poultry shipments to Russia are limited to approved plants, warehouses and cold storage facilities which creates significant logistical problems in moving product through other channels. Poultry stocks in cold storage in the region have also been heavily affected and exporters and traders are still accessing the volume of lost product. The Russian port of St. Petersburgrepresents more than 70 percent of all U.S. poultry meat imports.
The gulf ports account for 71 percent of corn, 65 percent of soybean, 22 percent of wheat and four percent of cotton exports. Wheat prices are already off about 15 cents per bushel due to the storm. For caffeine addicts, it is worth noting that New Orleans warehouses hold about a quarter of the raw coffee destined for the U.S. market. Barge traffic along the Mississippi has also been disrupted and will remain so for a long period of time.
Demand for meat and poultry has also been affected by the closure of restaurants in the affected area — approximately 200 McDonald’s, 120 Burger Kings, 40 AFC Enterprises and 60 Sonic.
Poultry production in Asia has also been hit by the avian influenza (AI) outbreaks. Hundreds of thousands of birds have been harvested in attempts to control the spread of the disease. AI continues to move westward and concern in Europe is growing.
The recent poultry production problems in Asia, pig disease in China, and Hurricane Katrina, make it difficult to analyze where the protein market is going in the next few months. Distribution problems and higher energy costs, however, will be felt by consumers in the U.S. and overseas.
Australia
Australian Federal Court Hears Government’s Pork Import Appeal
On August 23 and 24, a three-judge panel of the Australian Federal Court, heard the appeal of the government’s Director of Quarantine against an earlier court judgment affecting the import of pork into Australia. The Federal Court also heard the Notice of Contention filed by Australian Pork Limited (APL).
The government had filed a notice of motion seeking an expedited hearing of the appeal. Written comments related to the appeal were requested from the Director of Quarantine’s Counsel by August 30. APL may provide written responses to those comments by September 2. It is not known when the Federal Court will issue its decision on the appeal, but it is expected to take at least a month, and more likely several months.
The Director of Quarantine’s appeal was based on several grounds: the Court was wrong to conclude that part of the risk assessment underpinning the policy for importing pork into Australia was flawed; the Court was wrong in finding the risk management reasoning to be “unreasonable,” and the policy determination made by the Director of Quarantine could not be reviewed under the provisions of the “Administrative Decisions Judicial Review Act.”
The Notice of Contention filed by the APL took a more piecemeal approach, selecting a range of issues that focused on where it believes the risk of importing was understated. APL emphasized consequences, criticizing the risk assessment for not providing complete information on economic loss or loss of jobs as a consequence of Australia detecting Post Weaning Multi-Systemic Wasting Syndrome (PMWS). APL argued that the risk model was wrongly constructed, it understated risk and it made it unlikely that appropriate risk levels would be found.
Following the outcome either party could appeal to Australia’s High Court, but it would most likely take the case only if a new issue of law is introduced.
USMEF expects that there will be no change to the current import permit structure and trade will continue throughout the court deliberations.
Suspected PMWS Case In Australia
The court case hinges in theory on Australia’s claim to be free of PMWS. One suspected case in New South Wales was ruled out in July. The results are inconclusive in a remaining suspect case in South Australia. The investigation continues and restrictions on animal movement have been imposed. Australia is bringing in international experts to participate in the investigation, and it is likely to be several months before the investigation is concluded.
Industry Outlook
Hurricane Katrina and Avian Influenza Cast Shadow Over Exports And Imports
The aftereffects of Hurricane Katrina are still unfolding. But one thing is certain — U.S. agricultural exports and imports are going to be affected and consumers are likely to feel the effects at the grocery store.
Agricultural export statistics from 2004, record that meat and livestock products exported from New Orleans were destined for El Salvador, the European Union, Guatemala, Honduras, Hong Kong, Jamaica, Mexico, Russia, Trinidad, and Turkey. Poultry and poultry products out of New Orleans went to China, Georgia, Ghana, Guatemala, Haiti, Honduras, Hong Kong, Israel, Jamaica, Romania, Russia, Sierra Leone, Turkey and Zaire.
About 70 percent of all U.S. poultry exports to Russia are shipped out of the affected ports (Mobile, Gulfport, New Orleans and Pascagoula). Poultry shipments to Russia are limited to approved plants, warehouses and cold storage facilities which creates significant logistical problems in moving product through other channels. Poultry stocks in cold storage in the region have also been heavily affected and exporters and traders are still accessing the volume of lost product. The Russian port of St. Petersburgrepresents more than 70 percent of all U.S. poultry meat imports.
The gulf ports account for 71 percent of corn, 65 percent of soybean, 22 percent of wheat and four percent of cotton exports. Wheat prices are already off about 15 cents per bushel due to the storm. For caffeine addicts, it is worth noting that New Orleans warehouses hold about a quarter of the raw coffee destined for the U.S. market. Barge traffic along the Mississippi has also been disrupted and will remain so for a long period of time.
Demand for meat and poultry has also been affected by the closure of restaurants in the affected area — approximately 200 McDonald’s, 120 Burger Kings, 40 AFC Enterprises and 60 Sonic.
Poultry production in Asia has also been hit by the avian influenza (AI) outbreaks. Hundreds of thousands of birds have been harvested in attempts to control the spread of the disease. AI continues to move westward and concern in Europe is growing.
The recent poultry production problems in Asia, pig disease in China, and Hurricane Katrina, make it difficult to analyze where the protein market is going in the next few months. Distribution problems and higher energy costs, however, will be felt by consumers in the U.S. and overseas.
Australia
Australian Federal Court Hears Government’s Pork Import Appeal
On August 23 and 24, a three-judge panel of the Australian Federal Court, heard the appeal of the government’s Director of Quarantine against an earlier court judgment affecting the import of pork into Australia. The Federal Court also heard the Notice of Contention filed by Australian Pork Limited (APL).
The government had filed a notice of motion seeking an expedited hearing of the appeal. Written comments related to the appeal were requested from the Director of Quarantine’s Counsel by August 30. APL may provide written responses to those comments by September 2. It is not known when the Federal Court will issue its decision on the appeal, but it is expected to take at least a month, and more likely several months.
The Director of Quarantine’s appeal was based on several grounds: the Court was wrong to conclude that part of the risk assessment underpinning the policy for importing pork into Australia was flawed; the Court was wrong in finding the risk management reasoning to be “unreasonable,” and the policy determination made by the Director of Quarantine could not be reviewed under the provisions of the “Administrative Decisions Judicial Review Act.”
The Notice of Contention filed by the APL took a more piecemeal approach, selecting a range of issues that focused on where it believes the risk of importing was understated. APL emphasized consequences, criticizing the risk assessment for not providing complete information on economic loss or loss of jobs as a consequence of Australia detecting Post Weaning Multi-Systemic Wasting Syndrome (PMWS). APL argued that the risk model was wrongly constructed, it understated risk and it made it unlikely that appropriate risk levels would be found.
Following the outcome either party could appeal to Australia’s High Court, but it would most likely take the case only if a new issue of law is introduced.
USMEF expects that there will be no change to the current import permit structure and trade will continue throughout the court deliberations.
Suspected PMWS Case In Australia
The court case hinges in theory on Australia’s claim to be free of PMWS. One suspected case in New South Wales was ruled out in July. The results are inconclusive in a remaining suspect case in South Australia. The investigation continues and restrictions on animal movement have been imposed. Australia is bringing in international experts to participate in the investigation, and it is likely to be several months before the investigation is concluded.