Highly Pathogenic Avian Flu Outbreak Spreads, Containment Costs Rise

The highly contagious H5N2 strain of avian influenza has the poultry industry and federal agencies scrambling to contain the disease. An Iowa farm producing ten percent of the state’s egg-laying hens will destroy 5.3 million birds in Osceola County due to the detection of the virus, according to the U.S. Department of Agriculture (USDA). On April 27, 2015, the USDA confirmed that the virus has spread to five more farms in Iowa, affecting more than nine million birds representing about six percent of the state’s entire flock of egg-laying hens.

Nationwide, more than 7.8 million birds infected with influenza have been culled since early March. According to F. Dustan Clark, poultry health veterinarian for the University of Arkansas Center of Excellence for Poultry Science, birds are destroyed using a carbon-dioxide laden foam spray prior to being buried on site.

Minnesota and Wisconsin have both declared states of emergency and taken action to ramp up biosecurity efforts. In Minnesota, 46 farms in 16 counties have confirmed cases of avian flu, affecting more than 2.6 million birds in the state. The North Dakota Legislature has approved up to US$300,000 in emergency spending to combat avian influenza, and Minnesota is expected to spend US$7.3 million over the coming year.

Federal agencies will also continue contributing to containment efforts. Since December 2014, the USDA Animal and Plant Health Inspection Service (APHIS) has paid out US$60 million in indemnity funds to help farmers recover from the outbreaks.

Wasted feed, water, and other production inputs will incur high costs above and beyond the direct costs of containment and testing for the virus.

According to Tim Petry, a livestock marketing economist for North Dakota State University, higher prices for eggs and poultry are not expected, despite the large number of birds being culled.

“It isn’t only avian influenza that affects a market,” Petry said. “There are many, many things that go into this.” Many countries have limited or banned imports of poultry products from the Pacific Northwest due to the outbreak, which may drive up domestic supply, keeping prices low for U.S. consumers. Mexico, China, and South Korea have all taken action to impose import restrictions.

"[The outbreak] may not have a direct effect on shell egg pricing but any time you take production out of a marketplace there's likely to be some consequence," Iowa Poultry Association Executive Director Randy Olson said. Rob Jacobs, general manager of Co-op Elevator Association in Iowa, agrees, predicting that the removal of demand for corn from the local market could reduce prices by two to five cents per bushel. If the price of corn falls, farmer incomes and rural economies could be negatively affected. "I anticipate the market and production will recover, but right now we're reminding people that this is not a food safety issue and it's not a human health issue," Olson said.

Risk of human infection is low, according to the Centers for Disease Control and Prevention (CDC). Michael Schommer, spokesperson for the Minnesota Health Department, said that some farm workers have been advised to take antiviral medication as a preventative measure.

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