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Bird flu cost $1.3B in exports; broiler market hardest-hit

A USDA report details how the 2015 bird flu outbreak upset supply and demand for eggs and poultry.
Don Jenkins

Capital Press

Published on January 4, 2018 8:27AM

A USDA worker cleans equipment after a poultry flock was destroyed to stop the spread of bird flu May 23, 2015, in Sioux County, Iowa. In a new report, the USDA summarizes financial losses from the worst poultry disaster in U.S. history.

USDA

A USDA worker cleans equipment after a poultry flock was destroyed to stop the spread of bird flu May 23, 2015, in Sioux County, Iowa. In a new report, the USDA summarizes financial losses from the worst poultry disaster in U.S. history.


The 2015 bird flu outbreak killed relatively few broilers, chickens raised for meat, but it was that sector of the poultry industry that suffered the most economically, according to a new report by the USDA.

The virus chiefly struck turkeys and egg-laying chickens. Those sectors as a whole, however, did not lose financially. Fewer eggs and turkeys led to higher domestic prices, more than offsetting sales lost in flu-wary foreign markets.

Meanwhile, a still-healthy supply of broilers, which couldn’t be exported, lost value.

“The broiler industry suffered the brunt of the losses, which primarily originated in the egg and turkey industries,” said James Sumner, president of the USA Poultry & Egg Export Council.

The report issued by the USDA’s Economic Research Service summarizes the financial fallout from the worst poultry heath disaster in U.S. history. More than 50 million chickens and turkeys were killed by the virus or destroyed to stop the disease from spreading.

Foreign countries reacted by restricting the importation of U.S. eggs and poultry. The USDA found that export revenue in 2015 was $1.3 billion lower than the year before.

The virus appeared in the U.S. in a wild duck in Washington state. The first backyard flock infected was in Oregon, and the first commercial poultry farm struck was in California. The disease, however, claimed 87 percent of its victims in Iowa and Minnesota.

The virus, spread by migratory waterfowl, reduced the egg-laying population by 12 percent. Egg prices surged. Even though the U.S. exported 45 percent fewer eggs in 2015, the industry saw annual revenues increase by 32 percent, according to the USDA.

Bird flu reduced the turkey population by 12 percent, and exports dropped 41 percent. But turkey prices at home rose, and the industry’s overall revenues increased by 8 percent. The USDA report notes that the higher egg and turkey prices did not change consumer buying habits.

The disease affected less than 0.01 percent of the boiler population, according to the USDA report, but that segment of the industry alone lost $1.1 billion in exports. Domestic prices fell and revenues were down 12 percent from the previous year, according to the USDA.

The bird flu outbreak ended in June 2015. Sumner said export markets have not fully returned. Some foreign foodmakers found substitutes for eggs, and some U.S. exporters in 2015 gave up foreign markets to fill the shortage in the U.S.

And while other countries have lifted restrictions, China has been closed to U.S. eggs and poultry since Jan. 9, 2015, because of the bird flu outbreak.

“We’re hoping that changes in the near future, but there’s not necessarily any positive indication that will be the case,” Sumner said. “We don’t think (the closure) has any validity.”

In 2014, before the outbreak, China was 7 percent of the U.S. export market for turkeys and 4 percent for broilers.

“Once you lose markets, it’s tough to recover,” Sumner said. “We’re getting close to getting most back.”

The federal government spent $879 million responding to bird flu. The expenditures included $200 million to compensate poultry farms that euthanized flocks to prevent the virus from spreading, according to the USDA.

Previously, the worst U.S. bird flu outbreak claimed 17 million chickens and turkeys in 1983-84.



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