It's time for meat producers to talk turkey. Or chicken and pork. Trade issues are starting to flock together, and the potential for lost markets could ultimately lead U.S. producers of pork, poultry, and beef to the slaughterhouse.

From Russia to Taiwan, the European Union to Japan, import bans, stiff quotas, and retaliatory actions for our own government's trade miscues are jeopardizing access to key global markets. Russia's complete ban on U.S. poultry that took effect on Jan. 1 is only the latest door slamming shut. The EU has been closed to U.S. poultry producers for 12 years. Investors may just want to fly the coop.

A game of chicken
While it's doubtful that U.S. and Russian relations will escalate to DefCon 2 over meat products, the poultry ban could ratchet up trade war rhetoric that profits no one. Pilgrim's Pride (NYSE:PPC), America's largest chicken producer with 23% of the market, only just emerged from bankruptcy after selling nearly two-thirds of itself to Brazilian beef processor JBS, so it hardly needs more feathers ruffled.

Russia is the largest foreign market for U.S. chicken, accounting for more than 75% of its import quotas, and is one of the top five pork importers.

Washing their hands of responsibility
Poultry processors got henpecked over a chlorine rinse used to disinfect the meat. It's been an industrywide practice for 25 years, but the EU stopped using it years ago. Russia says they're just conforming to the standards of their neighbors, but the new regulations restrict chlorine to 0.5 parts per million, some 10 times lower than what's found in regular American tap water. 

Tensions were already high after Russia cut annual poultry quotas 20% in December, and then they lopped 43% off of pork quotas, too. Even if processors comply with Russia's new regulations, they'll still have to contend with additional quota cuts in 2011 and 2012 that will put poultry exports at almost half the level they were two years ago.

Going hog wild
JBS, Tyson (NYSE:TSN), and privately held Cargill control about 80% of the U.S. meat market. Although Tyson is a diversified meat processor, it might not be able to sidestep some of the more serious repercussions that chicken fights with Russia would hatch. The country accounts for 17% of the $1.4 billion Tyson had in international chicken sales. In the last four quarters, chicken was 36% of total revenues; beef, 40%; and pork came in at just 13% of sales. Hormel (NYSE:HRL), on the other hand, has more than half its revenue tied to pork products and only 19% to poultry.

For both producers, though, Wal-Mart Stores (NYSE:WMT) remains a key destination for their products, accounting for about 13%-14% of revenue.

Smithfield Foods (NYSE:SFD) is even more concentrated, with 70% of sales coming from pork. While Seaboard (NYSE:SEB) derives 12% of its pork revenue from Japan, and its Oklahoma slaughterhouse was specifically one of those barred by Russia.

Russia and Europe aren't the industry's only problem markets. Japan just banned imports of poultry and eggs from Texas after a flock of ducks tested positive for avian flu, and Taiwan banned the import of some beef and beef products because of fears about mad cow disease.

A rasher of profits
Despite the challenges facing the meat industry, their investors have been enjoying piggish returns over the past year. Tyson's stock is up more than 70% in the past year, while Hormel rose 28%. Even when pork producers found themselves in the pigsty of swine flu, their shares didn't wallow in the muck for very long. Smithfield's shares, for instance, are up 30% over the past six months. With swine flu fading from memory, hog futures rising, and pig herds thinning, pork producers could be happier than pigs in, er, mud.

However, the reopening of China could assist the American pork industry. China lifted the ban it imposed on pork products from the U.S., Canada, and Mexico in the wake of the swine flu outbreak. China remains the world's largest consumer and producer of pork, and while it threatened to impose a ban on U.S. poultry in retaliation for import tariffs on its tires, it never followed through.

At 50 million metric tonnes annually, pork demand in China remains beyond the capabilities of its domestic processors to meet. The market there remains fragmented with Zhongpin (NASDAQ:HOGS) and the three other top pork processors accounting for less than 10% of the total market share. China needs our pork as much as the processors need its markets.

Quitting cold turkey
And that balance of supply and demand could be what ultimately resolves the Russian crisis. Although it's taking a tough stance with quotas and health standards, the country still doesn't produce enough chicken to meet its need and may very well modify the ban, at least for 2010. If the situation doesn't get resolved, though, earnings in the industry could end up being more rare than hen's teeth.

Wal-Mart is a Motley Fool Inside Value recommendation.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.