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For the Birds

Written by Natasha Wheeler

As was stated in the May 30 issue of the Roundup, avian flu is really hitting turkey and chicken producers. So far just this year, there have been over 6.2 million turkeys and 34.3 million chickens affected, but that’s not the whole story.

If you are a cattle, or especially a sheep, producer, numbers that high seem unreal to you.

The U.S. Department of Agriculture (USDA) and the U.S. Poultry and Egg Association has the number of egg laying chickens at around 362 million, broiler chickens at 8.5 billion and turkeys at 235 million. Right now there are close to 30 million head of cattle in the U.S. If we add, the total we get is close to 9 billion chickens and turkeys. Given those numbers, avian flu has affected only around 0.39 percent of the chicken and turkey population. At not even a one-half of one percent, we realize that the poultry disease we are all talking will not have much impact, unless it is not controlled.

Avian flu does come from wild waterfowl, so it can really spread in the spring or winter months where there is lots of movement. Vaccines are either not practical or are not effective.

So what do these losses mean to the cattle producer? “Not much,” says Kevin Good, CattleFax senior analyst, who expects very little impact will be seen on the beef side as a result of the poultry losses.

“There are two camps on what this means for beef. One is bullish and one is bearish. What I see right now is that things are still in balance,” he says. “They will lose a little production, yes. Although for now it seems to be hitting the egg guys worse than anyone else.”

In terms of meat production, Good thinks there will be a big year-over-year increase in broiler production, and the bigger issue in all of this will be exports. That is what the livestock industry is watching.

According to Progressive Farmer, based on USDA forecasts, broilers were poised to ramp up production to almost 40 billion pounds this year, from 38.5 billion pounds in 2014. Turkeys, now expected to drop about two percent in terms of production, were set to go up to 6 billion pounds from 2014’s level of 5.7 billion pounds.

Oklahoma State University Livestock Marketing Specialist Derrell Peel agreed. He stated the fact that poultry producers are now shut out of several export markets will have an effect here in the U.S. that may seem counter-intuitive.

He said, “In the short run we are going to see increased domestic supplies of poultry. Depopulating birds because they are sick won’t have a negative supply impact here in the U.S. due to the loss of exports.”

South Korea, Mexico, Canada and China have banned imports of poultry and poultry products.

Would a bigger domestic supply of broiler meat hurt beef sales? Peel said that seems unlikely based on recent numbers from the Choice Retail Beef Demand Index.

“It is my belief that people who were priced out of the beef market have probably been out for two or three years now,” said Peel. “Lower prices for poultry may well mean more consumption, but I don’t think it will come at the expense of beef. The only reason we aren’t selling more beef today, even at these higher prices, is simply because the supplies aren’t there.”

Those little birds add up to a huge number of pounds, don’t they?