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Bird Flu Update · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the Ag Market Risk Management Strategy, come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity features and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Meyer.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_00: Today is April 29th.
• 0:25
  SPEAKER_00: In today's podcast, we are going to take a deep dive into the bird flu topic.
• 0:30
  SPEAKER_00: Cases have surged in the United States, causing things like egg prices to rise.
• 0:35
  SPEAKER_00: To inform us on the matter today, I am honored to have on Dr.
• 0:38
  SPEAKER_00: Schaefer.
• 0:39
  SPEAKER_00: And Dr.
• 0:39
  SPEAKER_00: David Reeves with a to the Dr.
• 0:42
  SPEAKER_00: Schaefer there, he is a senior director in poultry technical services at Zoetta, and he's leading a team and uh providing support to all sectors of the poultry industry.
• 0:51
  SPEAKER_00: And Dr.
• 0:52
  SPEAKER_00: David Reeves is a senior technical services uh that specializes in turkeys.
• 0:58
  SPEAKER_00: So thank you for coming on the show with us today.
• 1:00
  SPEAKER_00: Uh we're really excited to have you on.
• 1:02
  SPEAKER_01: Glad to be here.
• 1:03
  SPEAKER_01: Great to be here.
• 1:05
  SPEAKER_00: Well, uh, please take us through a little bit of an intro on uh uh tell us more about the deadliest bird flu outbreak we've had in the past seven years here and uh just kind of tell us a little bit about what we're dealing with.
• 1:16
  SPEAKER_02: Okay, I I guess I'll take that one, uh Mike.
• 1:19
  SPEAKER_02: Um so this outbreak began um in the probably February time frame.
• 1:26
  SPEAKER_02: Of course, we were getting uh reports of isolations of viruses um uh in wild water in waterfowl um earlier in the year and uh and predictably it broke in commercial flocks um shortly thereafter.
• 1:41
  SPEAKER_02: Um the um the the number of birds affected uh obviously is changing because this outbreak has not yet uh run run its course.
• 1:51
  SPEAKER_02: Um currently, and these like I said, these numbers change over time.
• 1:55
  SPEAKER_02: The uh the totals are something like 26 million layers um have been affected, uh about uh 4 million turkeys and about 2 million um broilers.
• 2:06
  SPEAKER_02: And just to put some uh uh context in that, um that represents about 7% of the layer population and about 3% of the turkey population um so far.
• 2:21
  SPEAKER_02: And uh you know, we're um we're seeing um uh somewhat of a similar type of outbreak in many respects to uh to our 2015 outbreak um in geographic distribution and and and so forth and the types of birds affected, but over but just in general terms, that's what we're dealing with currently.
• 2:42
  SPEAKER_00: Nice.
• 2:43
  SPEAKER_00: So you talked about a few of the numbers there, uh uh geo geography-wise, uh, what areas are getting hit the hardest here?
• 2:50
  SPEAKER_00: I know Iowa's had a lot, but uh where do you see this occurring?
• 2:54
  SPEAKER_01: Yeah, I'll take that one, John.
• 2:55
  SPEAKER_01: Uh primarily Minnesota, Iowa, South Dakota, that's the area that's that's hardest hit this time.
• 3:04
  SPEAKER_01: And it was the area that was hardest hit back in 2015 as far as uh you know the number of premises and the number of birds um that had to be destroyed, yeah.
• 3:17
  SPEAKER_00: Now you you compared this to 2015 a couple of times there.
• 3:21
  SPEAKER_00: How is this compared to 15 uh from an aspect of um you know the the airways?
• 3:27
  SPEAKER_00: I know they've talked about how like uh in 2015 52 million birds were euthanized.
• 3:33
  SPEAKER_00: Uh this is all in all three airways, or how is that working compared to 2015 with what we saw then?
• 3:41
  SPEAKER_01: Yeah, I think uh this time there have been more flocks affected in the Atlantic area, and there have been some uh some wild bird detections uh in the Pacific area.
• 3:57
  SPEAKER_01: The central, the Mississippi flyway is still the one that's uh most heavily affected.
• 4:03
  SPEAKER_01: It's you know, that area there, Minnesota, Iowa, South Dakota, there are an awful lot of lakes in those areas, and uh a lot of waterfowl tend to congregate there on their way back north for the breeding season.
• 4:19
  SPEAKER_01: And uh as long as they hang out in that area, we'll probably still pick up a few positive farms for another at least month or two.
• 4:29
  SPEAKER_02: So, Mike, it's it's very similar to what we saw in 2015 as it relates to commercial flocks.
• 4:36
  SPEAKER_02: I mean, in 2015, the Pacific Flyway had a few um cases reported, and there were virtually none in the Atlantic flyway.
• 4:45
  SPEAKER_02: Um, but when you look at it on a macro level, it's still that Mississippi flyway in the areas that David just um uh mentioned, being where everything seems to be concentrated.
• 4:56
  SPEAKER_00: The pace at which um birds are being affected, you know, 52 million and 15, but uh we're at about 26, like you mentioned there um earlier.
• 5:06
  SPEAKER_00: It it seems like it's occurring a lot faster, though, in the process.
• 5:10
  SPEAKER_00: Do you have any um any idea on what the end game is here, uh when this will kind of get cut off on a timeline, and how bad is this really going to get?
• 5:19
  SPEAKER_02: Uh David, you can take that one since it's such an easy question.
• 5:23
  SPEAKER_01: Well, I mean, if you just look at the at the cases by a week, you know, they it sort of peaked at the first of April, and there have been fewer detections each week since then.
• 5:35
  unknown: Okay.
• 5:36
  SPEAKER_01: And so, you know, one way to look at it would be to project that it's gonna continue to decrease through May and probably into June, with the last case hopefully showing up around the first of July.
• 5:51
  SPEAKER_01: Just if you if you overlaid the curves 2015 versus 2022.
• 5:58
  SPEAKER_01: That's what I would expect to to see.
• 6:01
  SPEAKER_01: And it really, like I mentioned before, it depends on when those migratory birds decide to go ahead and move north into the areas where they tend to uh to breed.
• 6:12
  SPEAKER_02: Mike, I will say that um, you know, David is his projections are based on historical experiences.
• 6:20
  SPEAKER_02: There's always an outlier um possibility that this thing doesn't go away and it drags on well into the summer.
• 6:27
  SPEAKER_02: I mean, if you listen to um many of the USGA APHIS webinars that they that they uh have on this topic, um they'll uh they'll always allow for that possibility to also occur.
• 6:39
  SPEAKER_00: So how how is your industry handling this from a perspective of are they euthanizing the flocks that have it, the surrounding areas?
• 6:48
  SPEAKER_00: How are they tackling that to try to um minimize damages?
• 6:52
  SPEAKER_02: You know, compared to 2015, I can say that we're doing a much better job controlling this this um this outbreak.
• 6:59
  SPEAKER_02: Um in 2015, we saw a lot of farm-to-farm transmission, uh indicating that there was probably a lack of sufficient biosecurity uh going on, and also we weren't as quick to uh euthanize the flocks.
• 7:13
  SPEAKER_02: That's a key component of control is being able to quickly euthanize these flocks and and give the virus as little opportunity to spread as possible.
• 7:22
  SPEAKER_02: And so what we're seeing mostly in this case is um, and there's a few exceptions, of course, but mostly we're seeing index cases, which means that it's mostly wild bird origin to commercial flocks instead of commercial flocks to commercial flocks.
• 7:38
  SPEAKER_02: So um, you know, there's there's a limited amount of um measures you can take in in many cases to to um completely eliminate these wild bird introductions, but you but we have I think clearly demonstrated that uh we've managed to minimize the amount of farm-to-farm transmissions.
• 7:57
  SPEAKER_01: Yeah, I agree, John, and that's definitely a very valuable lesson that we learned back in 2015 is that once you know a farm is positive, the sooner you can euthanize those birds and get them either in the composting process or buried or however you're gonna dispose of them, the better off everybody is because those positive birds are producing that virus at a tremendous rate, and it just uh allows for a lot of spread from one place to another that really doesn't need to occur.
• 8:32
  SPEAKER_01: And the local authorities as well as the USDA have been very cooperative in terms of allowing people, once they get that initial uh presumptive positive, uh to go ahead and start that process that'll usually be confirmed within a couple of days by the national lab out in Ames, Iowa.
• 8:55
  SPEAKER_01: But that presumptive positive, if once you notify the proper authorities and get the okay, you can go ahead and start that depopulation process and prevent that spread from farm to farm.
• 9:08
  SPEAKER_00: Are there any other ways uh people can fight this with the vaccines in the future?
• 9:13
  SPEAKER_00: Or uh what are you guys working on, uh I guess in your industry with uh all this occurring?
• 9:18
  SPEAKER_00: What are you learning uh from more of a medical perspective?
• 9:22
  SPEAKER_02: The numbers are obviously disturbing what we've been discussing so far, which is um a lot of turkeys and a lot of layers relative to the total population of these commercial blocks out there.
• 9:34
  SPEAKER_02: But the but the truth of the matter is broiler birds, which are mainly raised in the deep south, um are represent just so many more, so such a larger business in these two sectors, it it dwarfs it really.
• 9:49
  SPEAKER_02: And to date, um, there hasn't been that many um infections, if any, reported in in the deep in the deep south uh in commercial flocks.
• 10:00
  SPEAKER_02: And so um vaccination is is a process is a measure that a lot of countries take who absolutely can't control this virus, and it's a kind of a last resort um measure.
• 10:13
  SPEAKER_02: Um, because what it what it does most most uh even influenza vaccines will prevent the infection from killing the birds and prevent symptoms or clinical signs, but it may not prevent the birds from still cycling the virus and uh and passing it on to another uh to to other flocks.
• 10:34
  SPEAKER_02: You still have what we call leakage or shedding of the virus through the vaccine.
• 10:40
  SPEAKER_02: And so what this allows the virus to potentially do is to recombine with other virus strains out there and create even more virulent strains.
• 10:49
  SPEAKER_02: And it also um and in which you know in a in a very remote case could be potentially um infectious to people if if the right virus got loose.
• 10:59
  SPEAKER_02: And secondly, um if once you start vaccinating, it's harder to monitor flocks for which ones are vaccinated versus which ones um uh have a uh uh a wild type infection.
• 11:12
  SPEAKER_02: And then the last thing is it really hurts your export markets whenever you um whenever you start to vaccinate flocks because the monitoring becomes so much more complicated in being able to determine what's a real infection and and what's a uh um a vaccine reactor a vaccine uh response to vaccine.
• 11:32
  SPEAKER_02: So um so that's kind of the uh a very general overview of of how this thing um uh plays out relative to vaccination.
• 11:41
  SPEAKER_01: Yeah.
• 11:41
  SPEAKER_01: The bottom line is the chances of uh vaccinating all the poultry here in the U.S.
• 11:48
  SPEAKER_01: anytime in the near future is very slim.
• 11:51
  SPEAKER_00: Is is there a reason the deep south isn't getting it compared to the north?
• 11:56
  SPEAKER_02: It's purely speculative.
• 11:57
  SPEAKER_02: I'd imagine it's just the wild, the wild game, wild um waterfowl population uh doesn't really like it in weather that hot.
• 12:06
  SPEAKER_02: So they stay up there in Minnesota and Iowa and those areas as well.
• 12:10
  SPEAKER_02: That's right.
• 12:11
  SPEAKER_00: We've talked about um the end game now, and uh let's talk a little bit more about the future with just repopulation with these flocks taking a hit.
• 12:20
  SPEAKER_00: How long does it take this industry to repopulate?
• 12:24
  SPEAKER_01: David, you want to take that from I tell you from the the turkey standpoint and even on the broiler uh chicken type facilities, it's not that long of a process as long as you have the chicks and pults available to come back in with.
• 13:16
  SPEAKER_01: Uh those farms that aren't directly in contact with that infected premises but are within that 10-kilometer uh control zone can actually re repopulate before that control zone is lifted.
• 13:32
  SPEAKER_01: And that didn't used to be the case.
• 13:34
  SPEAKER_01: So um in the face of this outbreak, the industry can actually come back in and repopulate areas sooner than they would have been able to back in 2015.
• 13:46
  SPEAKER_01: The big problem is with the commercial egg producers, uh, in terms of repopulating one of those several million bird complexes, it just takes a while to do that.
• 13:59
  SPEAKER_01: It's not gonna happen in any short period of time.
• 14:03
  SPEAKER_02: Yeah, and one of the reasons for that is that um, you know, for every for every um layer pullet, let's call it a commer uh pullet intended to be a commercial laying head, you've got to hatch that from an egg, right?
• 14:16
  SPEAKER_02: And the birds that lay those eggs are parent flocks, and there's not but so many of them out there.
• 14:23
  SPEAKER_02: So if you've deep if you've euthanized um, you know, 10% of the of the national flock, you just can't repopulate farms uh overnight, even if they even if the the facilities were cleaned and ready to go, there's just not the there's just not the uh the the day old chicks available to place in them uh because the breeder stock is not is not that is not that large is not sufficiently large to to accommodate that kind of um uh uh placement in a short period of time.
• 14:53
  SPEAKER_00: So as we wrap up today's show, uh just the last question here, I'd probably say, uh what does this mean for the poultry industry now and going forward, I guess, as you guys have some final comments?
• 15:05
  SPEAKER_01: Well, I did see one projection from USDA uh in terms of the turkey market, and they project that you know production was down a little bit in the second quarter of this year, but they project a decrease in production of about four and a half percent in the third quarter and a little over three percent in the fourth quarter.
• 15:28
  SPEAKER_01: So there will be an impact on uh on turkey production, and you know, the price of breast meat has gone from four dollars back in February up to like five fifty now, and may even go above in 2015.
• 15:44
  SPEAKER_01: I think the highest was like five dollars and eighty-five cents a pound, but it may surpass that by the time things kind of bounce back.
• 15:53
  SPEAKER_02: Yeah, and long term, you know, I think this is uh I mean we get better at controlling this virus uh year over year um because we have more sophisticated diagnostics.
• 16:04
  SPEAKER_02: We we know how to practice biosecurity, and we get better at the um at the uh depopulation and uh and control of the virus.
• 16:14
  SPEAKER_02: Um so I think this is gonna be a problem we're gonna probably be living with uh sporadically uh going forward.
• 16:20
  SPEAKER_02: Um, you know, to date the the like I said, there's nine billion broilers approximately produced every year in the United States, and only two million have been affected, primarily because as we discussed, they're in the Deep South.
• 16:32
  SPEAKER_02: Um so that part of the production is pretty much unaffected other than the states where we've had some some breaks um get put on an export ban for until they clean up the the flocks.
• 16:45
  SPEAKER_02: But uh but the uh the current the current approach of uh of um euthanizing affected birds um and uh and then repopulating after the premises have been determined to be clean um is still the best approach for the U.S.
• 17:02
  SPEAKER_02: It protects uh adjacent flocks um and and protects the uh the livelihoods of people who um who are uh you know in this in this uh type of production scheme, and uh for the foreseeable future, um we see that as being the uh the measure of choice, at least for the U.S.
• 17:21
  SPEAKER_01: Yeah, and one one bright spot in this whole thing is that uh during the 2015 outbreak and into this outbreak, the cooperation between the industry and the USDA and the local uh regulatory folks has has really improved.
• 17:40
  SPEAKER_01: And I think uh most places now have it down pretty well and can get things going and and get that depopulation process started a lot quicker than we were able to in the past, and it makes the whole thing go a lot more smoothly.
• 17:57
  SPEAKER_00: Great stuff today, guys.
• 17:58
  SPEAKER_00: We appreciate your time so much, and uh hopefully we'll have you on the show another time as well, but we appreciate it.
• 18:05
  SPEAKER_00: Thank you.
• 18:06
  SPEAKER_01: Thank you, thank you.