Agriculture and Money: Avian Flu Impacts Supply, Price

by May 19, 2015

This year’s outbreak of Avian flu, also known as bird flu, may be the worst ever for American agriculture producers.

There has been bird flu detected in the U.S. since December. But in recent weeks, large egg suppliers across the country have been seeing a growing impact on both stock prices and egg supply.

Avian flu has been spreading across the Pacific Northwest and Midwest. Thus far, it has affected more than 33 million chickens, turkeys and ducks, The New York Times reported.

As a precaution, farmers have been euthanizing entire flocks that have been infected with the flu, the Times reported. The outbreak has affected egg producers on a large scale, with China, Japan and Mexico banning U.S. poultry imports.

Prices are rising, with a carton of a dozen eggs jumping from $1.19 to $1.39 across the Midwest since April. Meanwhile, liquid eggs, which are used in other food products such as mayonnaise and cake-mix, have gone up 90 percent.

In the U.S., Iowa has been hit the hardest, with 25 million birds that may be lost due to the avian flu outbreak. Minnesota is also being hit hard.

Other states included are Washington, Oregon, California, Idaho, Montana, North Dakota, South Dakota, Iowa, Missouri, Arkansas, Kansas and Wisconsin, Reuters reported.

Photo provided by Yahoo Finance

Post Holdings’ stock price has gone down in the last five days. Photo provided by Yahoo Finance

A consumer goods firm, Post Holdings, said its breakfast division, Michael Foods, has been unable to fulfill its contracts for supplying egg products, the St. Louis Post-Dispatch reported.

Post Holdings has lost 25 percent of its egg supply to the outbreak. It has declared an emergency called “force majeure,” which no longer requires the firm to fulfill some of its contracts due to unforeseen circumstances.

Before declaring “force majeure,” Post estimated $20 million of its earnings through 2015 would be lost, the Post-Dispatch reported.

For story ideas, look to other industries that are seeing the toll of the Avian flu outbreaks, such as shipping firms and restaurants, to see if they’ve seen price increases or lack of business. If the bird flu hasn’t reached your state, but it produces eggs and chickens, see how they may be preparing for the outbreak if it does arrive.