Avian flu outbreaks slow, but impacts continue

The deadly H5N2 virus, or avian flu virus (bird flu), was first detected Minnesota in early March, and after peaking in early May, has now declined considerably. As of June 15, there had been no new cases of the avian flu reported in Minnesota in the past ten days. Similarly, there have been no new cases of the bird flu in Iowa since June 9. Poultry experts and scientists had predicted that the virus would diminish considerably in intensity, once the outside temperatures reached 75° F. or higher on a consistent basis. It appears that this has occurred in most of the hardest hit areas of Minnesota and Iowa.

As of June 15, there have been 222 confirmed cases of the H5N2 virus in the U.S., resulting in the loss of over 47 million birds nationally. Minnesota has had 105 cases of avian flu confirmed, which has resulted in the loss of about 9 million birds, primarily market turkeys, but also some large egg laying operations. There has been a high concentration of confirmed bird flu cases in 5 or 6 counties in central Minnesota. Iowa, the largest egg-producing state in the U.S., has been hit particularly hard, with 74 cases of the virus, resulting in the loss of over 30 million birds, which have been primarily egg-laying hens. The bird flu has also significantly impacted Nebraska, Wisconsin and South Dakota.

Even though the number of avian flu cases has waned in recent weeks, the economic impacts of the worst bird flu outbreak in U.S. history are not likely to disappear any time soon. The first turkey producers in central Minnesota that broke with the virus in early March have started to re-populate their barns, slightly over 90 days after their flocks were depopulated. No egg laying operations in Minnesota or Iowa have yet returned to production, and the return could be several weeks away yet.

The combination of the birds that died and were euthanized, along with the time out of production, is having a significant financial impact on producers. There was a partial reimbursement from USDA to producers for the birds that were euthanized; however, there was no financial reimbursement or insurance coverage for birds that died, or for the downtime in production. The bird flu outbreak has also affected feed suppliers and other input providers for poultry farms. There have also been employment reductions on poultry farms and in processing plants, as well as in associated businesses. The hardest hit counties in Central Minnesota and Northwest Iowa have especially noticed the community-wide economic impacts resulting from the avian flu outbreak.

Consumers have also been feeling the effects of the bird flu outbreak at the grocery store. Retail egg prices in early June at some locations had risen 2-3 times above the egg prices in early April. The level of increases in retail egg prices has varied across the Upper Midwest, depending on how the bird flu has affected various egg suppliers. The reduced egg supply and higher prices has also impacted restaurants, bakeries and other egg product users. Iowa lost approximately 37% of their egg laying capacity to avian flu in the past two to three months, as well as significant losses in Minnesota and other states. As a result, some experts feel that it could take up to 12-18 months for the egg supply chain to return to normal, provided there are no additional major production losses from the bird flu virus.

Some consumer experts have raised concerns about the bird flu impact on turkey supplies and prices, especially as we get closer to Thanksgiving later this year. While there could be some localized turkey shortages and significant price increases in the Upper Midwest, at this point, it doesn’t appear that there will be nationwide concerns with turkey supplies in the coming months. The combination of a large amount of turkey meat in cold storage and reduced turkey exports should help ease the situation.

 

Another negative economic impact on the Upper Midwest turkey and poultry industry is the fact that 75 countries have either totally or partially closed export markets to poultry products from portions of the United States, as a result of the avian flu outbreak. The export restrictions affect approximately 233,770 poultry farms in the U.S., even the farms that have not been directly impacted by the H5N2 virus. In a normal year, about 20% of the poultry products in the U.S. are exported to other countries. Since the total or partial export restrictions have been implemented, poultry exports to countries with U.S. poultry import restrictions have declined 13-14%, as compared to a year earlier. This includes major poultry export markets such as China, Mexico, the European Union, South Korea, and Taiwan.

As producers begin to re-stock their barns following cleaning and disinfection, the biggest concern is whether or not the avian flu virus will return in the coming months. There is still considerable uncertainty regarding the cause and rapid spread of the bird flu virus. There is also concern regarding the potential return of another serious avian flu outbreak next fall, when temperatures cool, and migratory birds begin the fly south. USDA and private companies are working on potential vaccines to fight against the bird flu virus; however, commercial availability of a viable vaccine is likely still several months away.

Many large poultry farms already had strong biosecurity programs in place prior to the outbreak of the highly contagious H5N2 virus; however, USDA is now encouraging poultry operations of all sizes to review and, if necessary, step-up biosecurity efforts on their farms. Biosecurity measures include restrictions on people and vehicles entering poultry farms or facilities, using known feed and water sources, and good sanitation procedures for employees and others that enter poultry facilities. Producers are also analyzing their poultry facilities to see if any changes can be made to ventilation systems and other operations within the poultry barns.

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