Bird Flu Worries Temper Grains Markets

CHICAGO - Mar 1/06 - SNS -- Trading interest on world agriculture commodity markets remains slight against ongoing worries about the impact fresh cases of the H5N1 strain of avian influenza will have on demand for poultry and the grain needed to grow it.

It takes about two pounds of feed to produce one pound of poultry meat. The FAO expects poultry demand to drop 3 million metric tons (MT) this year because of consumer fear over the virus, which the FAO and other organization continuously warn can spread from birds to people, possibly causing a flu pandemic.

The FAO was forced yesterday to add that people cannot catch avian influenza from eating cooked chicken, but the damage has been done. For grain and protein meal markets, fear mongering over avian influenza could cost it six million MT of demand this year.

What makes this development more troubling is the new western emphasis on tapping into renewal energy sources, especially ethanol and biodiesel. These are creating new demand streams, whose byproduct is another animal feed ingredient. Feed ingredients which do not fit into the biofuel strategy will face increased competition in a potentially smaller market.

Subscribers can read the full text of the article by Clicking here