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Agricultural News

Peel Analyzes How Avian Influenza Impacting Livestock and Meat Markets

Mon, 18 May 2015 15:07:38 CDT

Peel Analyzes How Avian Influenza Impacting Livestock and Meat Markets Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow/Calf Corner newsletter.

The Avian Influenza outbreak continues to grow and leads to more questions about the impact on livestock and meat markets. USDA-APHIS (Animal and Plant Health Inspection Service) reports that the current toll is nearly 34 million birds depopulated. The majority of these are laying hens, followed by turkeys with relatively few broilers at this time. As a result, the biggest and most immediate impact for consumers is in egg markets, especially in the north central part of the country. The reduced supply of table eggs as well as breaking eggs used in food service will impact consumers directly and indirectly.

The direct impact of Avian Influenza on poultry meat supply is minimal and likely to remain that way. The current depopulation total of 33.8 million birds is 0.38 percent of the 2014 poultry slaughter total of 8.9 billion birds. As bad as it is, it is very unlikely that enough birds will be slaughtered to impact domestic poultry production significantly. Even for turkeys, which only represent 2.7 percent of total poultry slaughter, the current turkey depopulation represents less than 3 percent of 2014 U.S. turkey slaughter. Both broiler and turkey production are still expected to surpass year ago totals unless the outbreak expands significantly.

While the direct loss of birds is unlikely to materially impact total poultry production, the impact on domestic consumption is more likely to be significant and is counterintuitive. The biggest impact of Avian Influenza on meat markets is the closure of poultry export markets. In 2014, 8.2 billion pounds of poultry were exported from the U.S., which is 18.2 percent of the 45 billion pounds of total poultry production.   Both broiler and turkey exports, already struggling in 2015, are forecast to decrease even more in 2015 as result of the outbreak. Broiler exports are expected to be down roughly 9 percent, though the situation is very dynamic and the impact could get larger or smaller depending what happens in the coming weeks.

Decreased broiler exports will add to already expanding broiler production resulting in increased domestic consumption of broilers. The anticipated 5.2 percent year over year increase in broiler production, augmented with decreased broiler exports, is expected to push domestic broiler consumption up by roughly 6.5 percent. Increased broiler production will combine with an expected 6.7 year over year increase in pork production to push total 2015 U.S. meat and poultry production up by 3.5 percent despite a projected 1 to 2 percent year over year decrease in beef production. Per capita beef consumption may show a slight year over year increase in 2015 with increased beef imports and decreased beef exports. Total domestic red meat and poultry consumption is projected to increase by 4.2 percent compared to year ago levels.



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