Source: Tom Johnston, MEATINGPLACE.COM, 9/3/10

Pilgrim's Pride Corp. said today it will resume chicken exports to Russia on Saturday after USDA’s Food Safety Inspection Service finalized certificates.

Pilgrim's plants in Boaz, Ala., Russellville, Ala., Athens, Ga., and Dallas, Texas, are packing product for Russia.  

"Demand from Russia is very strong. We have sold out our entire Russian-approved production for the next 30 days and prices have continued to strengthen," Pilgrim’s President and CEO Don Jackson said in a news release.  "Russia is an important export market for U.S. chicken and the re-opening of the borders will be a significant benefit to our company and industry."

Other major poultry processors are lining up as well having received approvals from both Russia and the U.S. government, according to BMO Capital Markets analyst Ken Zaslow. Tyson Foods has five plants and Sanderson Farms has three plants ready to ship to Russia.

“We believe this is a clear positive for chicken companies as contracting for shipments of leg quarters to Russia remains around (60 cents per pound),” he said in a note to investors. “Moreover, published (domestic) leg quarter prices likely will also increase over the next two to three weeks as leg quarter inventories are drawn down over the next six weeks.”

Zaslow said, however, the full impact from U.S. chicken shipments might take some time because Russia is limiting them to companies approved by both USDA and Russia; leg quarters turned away by Russia will be discounted and sent to other markets; and processors might see higher storage costs related to Russia-bound product.

In July, U.S. and Russian officials signed a formal export agreement allowing U.S. companies to use as pathogen-reduction treatments cetylpyridinium chloride, peroxyacetic acid or hydrogen peroxide. Earlier this year, Russia had banned all U.S. chicken processed with chlorinated water.  

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