Sun, Jul 05, 2009

Business

Flu fears net bonus for food banks

By John Schmeltzer
Chicago Tribune
Tucson, Arizona | Published: 05.15.2006
CHICAGO — Fears about avian flu have dramatically cut chicken exports, creating a bonanza for the food depositories that serve the nation's poor and hungry.
Tyson Foods, the country's largest processor of chicken and beef, last week announced it is donating 6 million pounds of chicken to America's Second Harvest, the agency that coordinates food donations nationally for the food pantries and depositories. Earlier this year, Perdue Chicken Co. donated more than 1 million pounds to the food agencies.
And, starting this week, 11 semis full of chicken quarters, purchased off the market for $32.5 million by the U.S. Department of Agriculture, will begin arriving at local food depositories.
Such donations are rare, and certainly generous, but not entirely altruistic.
The nation's chicken and meat processors are dealing with a glut caused by the fears about avian flu and, to a lesser extent, mad cow disease.
Rather than dumping the chicken and meat onto the market and further sinking retail prices, the food companies are donating the products to the food depositories and taking a tax write-off on the charitable contribution.
Massive production surpluses combined with sagging demand amid avian-flu fears have already sent prices plunging to the lowest levels this decade. In Chicago, leg quarters have been selling for as little as 39 cents a pound, and boneless chicken breasts have been selling for $1.69 a pound.
Prices for chicken leg quarters have fallen 42 percent in the past year; prices for boneless chicken breasts have fallen nearly 30 percent, according to figures compiled by the U.S. Department of Agriculture.