US poultry exports plunge with avian flu scare

Daniel Acker | Bloomberg | Getty Images

The avian flu outbreak that has spread in 12 states is taking its toll on more than just the millions of birds that will be destroyed.

Poultry producers and manufacturers have already seen their exports drop in the first quarter of 2015 and fears of a greater downturn in poultry consumption were increased Monday after the virus was detected in a flock of 200,000 chickens in Jefferson Country, Wisconsin. What's more, a new outbreak at an Iowa farm will mean 5.3 million more chickens will be destroyed.

Read MoreCNBC explains: Avian influenza, or bird flu

Bans on imports of U.S. broilers and turkeys took effect in January in response to the outbreak. Bans in China and South Korea, which together made up 5.5 percent of total U.S. broiler exports in 2014, resulted in 25.5 million fewer pounds of broilers to be shipped in February compared to February 2014.

Broiler shipments overall were down 17 percent in February, from a year earlier. Noting the decrease in poultry activity, the U.S. Department of Agriculture last week cut its forecast for turkey exports in 2015 to 720 million pounds, more than 10 percent less than 2014. Broiler and turkey exports in 2015 together will be more than 700 million pounds below last year's levels, a drop of 9 percent.

Hormel Foods, the Austin, Minn.-based manufacturer of meat products, expressed concern Monday about its Jennie-O Turkey Store segment. The company hopes to make up the difference in other divisions.

"We are experiencing significant challenges in our turkey supply chain due to the recent HPAI outbreaks in Minnesota and Wisconsin," President and CEO Jeffrey Ettinger said in a statement. "We expect the financial impact of HPAI to be partially offset by favorable hog prices benefitting the Refrigerated Foods segment and portions of the Grocery Products segment."