Bloomberg News

Bachoco Falls as Bird-Flu Outbreak Confirmed: Mexico City Mover

February 18, 2013

Industrias Bachoco SAB, Mexico’s biggest chicken producer, fell for a second day after the nation’s Agriculture Ministry said bird flu cases were confirmed on seven of the company’s farms.

Bachoco fell 1.7 percent to 30.45 pesos at 11:02 a.m. in Mexico City, bringing the two-day drop to 3.8 percent. That would be the worst such retreat since Dec. 21 on a closing basis. The benchmark IPC index of 35 Mexican companies was little changed today.

The government’s Feb. 15 confirmation of Celaya-based Bachoco’s warnings the prior day fueled concern that the company will have to kill chickens to contain the threat. As many as 582,000 birds may have been exposed to the flu on the farms in the central Mexican state of Guanajuato, the government said in an e-mail.

“You have to be cautious, because we don’t yet know the magnitude of the damage from this outbreak,” Gerardo Copca, an analyst at Metanalisis SA, said in a telephone interview from Mexico City. “That’s what’s affecting the shares.”

Bird flu in the Mexican state of Jalisco last year helped fuel a pickup in inflation across Latin America’s second-biggest economy as the slaughter of birds drove up egg and chicken prices.

Bachoco had said in a Feb. 14 statement that it would take the necessary actions if the cases were confirmed.

The Agriculture Ministry as of last week hadn’t determined whether the flu is the same strain that infected poultry farms in Jalisco state last year.

Diversified Production

Guanajuato has 2.4 percent of Mexico’s egg-laying chickens, the ministry said.

Bachoco’s risks are contained because the company has diversified its production into about 100 poultry farms, Gustavo Teran, an analyst with Mexico City-based Corp. Actinver SAB, said in a telephone interview before the government’s announcement. He rates the stock a buy.

Bachoco investor relations official Claudia Cabrera didn’t respond to a phone call and e-mail seeking an update on the outbreak.

To contact the reporter on this story: Jonathan J. Levin in Mexico City at

To contact the editor responsible for this story: David Papadopoulos at

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