Bird flu sickens shares in chicken producers

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Shares in chicken producers were down on their cluck after a second case of the bird flu was confirmed in Tennessee.

The chicken farms, which are affiliated with Tyson Foods, are located less than two miles away apart and have begun euthanizing its chickens to prevent a the potential spread of the disease.

Shares in the company fell 2.5 per cent on Wednesday, prompting a slide rival chicken producers. Sanderson Farms fell 2.1 per cent, Pilgrim’s Pride lost 1.2 per cent and Hormel Foods, which makes processed chicken food products, retreated 1.2 per cent.

The virus, which rarely infects humans, was reported earlier this month by the Tennessee Department of Agriculture, which has quarantined the area in Lincoln County. There are also reports of the virus in Alabama.

Tyson said it was coordinating with the agriculture department and USDA on a quick response. All of its flocks are located within a six-mile radius of the original farm and will “not be transported unless they test negative for the virus”.

“This a bird health issue and not a food safety or human health concern,” the company said in a statement. “We don’t expect disruptions to our chicken business and plan to meet our customers’ needs.”

The outbreak was compounded by analyst downgrades on the day. Although Tyson posted strong first quarter results, investors have expressed concerns regarding an investigation by the Securities and Exchange Commission over alleged manipulation of a chicken pricing index.

John Staszak, an Argus analyst, said there was a potential for decelerating earnings in the upcoming quarters and was concerned about recent bird flu outbreak.

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