UBC - HPAI In The U.S.

• The progression of high pathogen avian influenza (HPAI) through US flyways and mandated commercial poultry flock depopulation has not had a discernable impact on broiler harvest or market prices to date.
• Turkey complexes continue to be the most susceptible to flock infection with the HPAI virus.
• HPAI outbreaks continue to affect the table egg production sector, particularly the egg product sector where an estimated three-quarters of that sector has been impacted to date.

HPAI Overview

HPAI, also known as Highly Pathogenic Avian Influenza or H5N1, is a contagious virus that has a high mortality rate among poultry. It infects the gastrointestinal and respiratory systems of the bird, causing vital organs to cease to function. HPAI spreads via infected animals that transmit the virus through their saliva, mucus, and feces, as well as through farm equipment and vehicles. Due to the densely populated nature of poultry holding facilities, HPAI tends to spread rapidly and can wipe out a large percentage of the flock in a very short period of time. This can lead to a sudden drop in supply and a sharp rise in the price of related products. As a result of the potential economic, social, and psychological damage that can be caused by the presence and threat of HPAI, the USDA has established guidelines to actively track and mitigate the impact on the industry. The recommended form of action is culling, which is a rapid depopulation of infected birds in order to minimize the spread of HPAI to healthier members of the flock. The immediate impact of HPAI in North America has been reflected across all related poultry and egg markets since its initial identification in Dec 2021.

Individual Sector Impact

Although the impact of HPAI has been prevalent in the poultry and eggs sector as a whole, the individual sector impact has varied as the spread of the virus continues.

• Broilers : Broiler markets have been the least impacted by HPAI in the poultry and eggs sector. Production continues to trend in line with 2021 and the five-year average. Depopulated birds due to HPAI only represent a fraction of the annual broiler harvest, and any bans of key trade partners have been offset due to solid domestic demand. Prices remain elevated from the previous year due to tight harvest supply and a depressed perception of parts/raw material. In addition, retail usage in the form of grilling has come into play in the last month, further bolstering the already strong prices with the seasonal trend.

• Turkey : Conversely to broiler prices, turkey markets have been significantly impacted by HPAI. YTD production was 5.4% below the 2021 period, and the most recent six weeks were 1.4% below the same period. Prices have been trending higher as limited supply, export constraining trade bans, and unplanned depopulated continue to weigh on the market. In addition, depopulation further tightens availability, continuing to push up high prices. Even when farms are restocked, it is likely that product banned from export would be reallocated to cold storage in order to minimize the impact of potential harvest shortfalls. However, there has been little discernable domestic price pressure from import bans on export clearance.

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