Export restrictions on U.S. poultry that followed the recent detection of virulent Newcastle disease in a California backyard flock did not have any meaningful effect on Sanderson Farms’ operations, company officials said.
On May 18, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) confirmed the presence of Newcastle disease in a small flock of backyard exhibition chickens in Los Angeles County, California. It was the first case of virulent Newcastle disease, previously referred to as exotic Newcastle disease, since 2003.
Speaking during a quarterly earnings call on May 24, Sanderson Farms CEO Joe F. Sanderson Jr. pointed out that some trade restrictions were placed on chicken from the United States after the disease event was confirmed, despite the fact that the disease did not appear in any commercial poultry flocks.
“Several export partners, including Mexico, temporarily banned the import of United States chicken. Product in transit was allowed to continue into the country. Mexico was the only market of consequence – to us – that took action,” Sanderson said.
However, Sanderson pointed out that parties from the United States and Mexico reached an oral agreement on May 22 to localize the ban, and a final agreement was reached the day after that.
“We resumed shipments to that country immediately, and that means yesterday,” he added.
When asked by one analyst if there was any material impact to Sanderson Farms’ business from the sales that got backed up, Sanderson responded that there was not.
“It’s wide open again,” Sanderson said, referring to trade with Mexico. “And the other countries were immaterial.”
Since APHIS announced the presence of Newcastle disease in that one small flock, no new cases have been confirmed to date.
Headquartered in Laurel, Mississippi, Sanderson Farms is the third largest broiler chicken company in the United States.