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Tyson Seeks to Reverse Chinese Duties on U.S. Chicken

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Sept. 27 (Bloomberg) -- Tyson Foods Inc., the largest U.S. chicken processor, said it will try to appeal China’s decision to impose anti-dumping tariffs on U.S. chicken shipments.

“We’re disappointed by the news and will continue to work through the U.S. government and our trade associations to reverse this decision,” Gary Mickelson, a spokesman for Springdale, Arkansas-based Tyson, said in an e-mail today. “We intend to do everything we can to continue selling chicken profitably to China, as well as seek ways to expand our poultry exports to alternative markets.”

China is implementing a duty starting today of as much as 105.4 percent on U.S. broiler chicken products. The rate will be 50.3 percent to 53.4 percent for U.S. companies that cooperated with China’s investigation and 105.4 percent for those who didn’t, the Ministry of Commerce said yesterday. Tyson Foods imports will be assigned a 50.3 percent duty.

The decision was made after China determined “a causal relationship” between U.S. companies dumping their products in the Asian nation at below market prices and losses in the Chinese poultry industry.

Mickelson declined to comment on whether the tariff would curb Tyson’s shipments to China.

Tyson fell 43 cents, or 2.7 percent, to $15.22 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have risen 24 percent this year.

Sanderson Farms

The tariff will reduce customers’ willingness to pay what they did before the duty set in, though it likely won’t cut shipments much, said Mike Cockrell, chief financial officer for Laurel, Mississippi-based Sanderson Farms Inc. The company’s imports will be charged a duty of 51.8 percent.

While Sanderson Farms is looking for avenues to change the Chinese government’s decision, “I don’t suspect it’s something they will revisit soon,” Cockrell said.

A spokesman for Pilgrim’s Pride Corp., Gary Rhodes, wasn’t available for comment.

Tyson is the largest U.S. chicken processor based on 2009 production, followed by JBS SA’s Pilgrim’s Pride unit, closely held Perdue Inc. and Sanderson, according to WATT PoultryUSA, a magazine covering the industry.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net.

To contact the editor responsible for this story: Steven Frank at sfrank9@bloomberg.net

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