U.S.-China tire spat could hurt chicken feet

CHICAGO (Reuters) - A developing trade dispute between the United States and China over automobile tires could hurt sales of U.S. chicken feet and other chicken products, should Beijing decide to retaliate against the United States.

Beijing said on Sunday it is investigating whether imported U.S. chicken and autos are being dumped on that market.

The U.S. chicken industry denied the dumping allegations and believes China is reacting to new U.S. tariffs on imported Chinese tires.

About half of the $800 million worth of U.S. chicken sold to China annually is chicken feet, or paws.

"If we weren't selling them to China for 60 to 80 cents, we would be selling them in the U.S. for rendering purposes for pennies on the pound. Obviously we are not dumping," said Jim Sumner, president of the U.S. Poultry and Egg Export Council.

Dumping generally implies that product is being sold at below market prices, either to claim market share or to sell excess supplies.

"For paws (chicken feet), we sell them at way above market prices, because here they are worthless," said Paul Aho, economist at Poultry Perspective. "So, it is the total opposite of dumping."

Even U.S. Agriculture Secretary Tom Vilsack denied the dumping allegations.

"What we are doing in agriculture is appropriate ... We are playing by the rules. We expect others to play by the rules," said Vilsack.

CHICKEN COMPANY SHARES FALL

China's allegations of dumping sent shares of U.S. chicken producers lower in Monday's trading.

Shares of top U.S. chicken producer Tyson Foods Inc fell nearly 3 percent, No. 2 producer Pilgrim's Pride Corp. dropped 2 percent and No. 4 producer Sanderson Farms Inc were also lower.

Chicken also may be targeted by China, because Beijing is disappointed with a U.S. provision that blocks the importation of cooked poultry products from China, the NCC said.

The United States exported 436,544 metric tons of chicken, valued at $376 million, to China in the first seven months of 2009, according to the NCC.

(Reporting by Bob Burgdorfer; Editing Bernard Orr)