With a case of Avian (chicken) flu, Pilgrim's Pride (NYSE:PPC) was the biggest loser on the New York Stock Exchange this morning. Fellow chicken producers Tyson Foods (NYSE:TSN) and former Motley Fool Stock Advisor pick Sanderson Farms (NASDAQ:SAFM) were also down. Is the market overreacting?

Here's what we have so far: Japan and South Korea banned U.S. chicken exports over the weekend after the flu turned up in Delaware. Both have policies to ban food imports from countries with the slightest hint of problems. Tyson and Smithfield Foods (NYSE:SFD) felt the sting of a similar ban in mid-December after mad cow disease surfaced in the U.S.

Notably, Japan has not lifted the import ban on beef even after sending an 11-person team to the U.S. in mid-January to study the situation. That may change. Reuters reports that the USDA is ending its investigation after finding that no "herdmates" of the infected cow had the disease. Regardless, because mad cow disease can be passed to humans, a long-term wait-and-see approach is understandable. In contrast, H7 avian flu virus does not transmit to humans.

Prior to the outbreak, Pilgrim's Pride benefited from a November purchase of ConAgra's (NYSE:CAG) chicken business. Even after paying $300 million in cash and 25.4 million shares, the acquisition was accretive to earnings. At 13.8 times trailing earnings, the stock looks attractively priced, and despite the bad news, today's decline has the feel of a buying opportunity.

With the USDA winding up its mad cow investigation, Tyson also may be positioned for a rebound. For the leading U.S. provider of meat protein, a 16.8 times earnings multiple looks cheap in today's market. For Sanderson, whose operations are focused in the Southeast, today's drop is probably a reflection of the stock having tripled off its 52-week low. And yet, at 13 times earnings, the company can hardly be seen as expensive.

Those looking for a really cheap egg should check out Bill Mann's find, Industrias Bachoco (NYSE:IBA). Selling at 4.3 times trailing earnings, it is Mexico's largest chicken processor. (Pilgrim is No. 2.)

Given the likelihood of a fast resolution to an H7 outbreak, and the growing demand for protein in U.S. diets, the market may have laid an egg on this one (sorry, Cal-Maine Foods (NASDAQ:CALM)). It might have also provided patient investors an entry into U.S. chicken processing stocks.

W.D. Crotty, who has a seven-chicken flock, does not own any of the companies mentioned in this story.