Avian flu impacts and overview of production cost variables

Bloomberg writers Megan Durisin and Elizabeth Elkin reported earlier this week that, “The bird flu outbreak ravaging poultry flocks around the world is now the worst since records begandriving up egg prices, threatening free-range chicken and potentially having long-term effects on animal health.

Durisin and Elkin explained that “Poultry losses since October nearly 70% higher than last year’s rate, reaching 16.1 million as of December 1, according to the World Organization for Animal Health. Before that, more than 138 million birds were lost in the 12 months to September, more than the previous five years combined, WOAH said.

The Bloomberg article also pointed out that “for now, high prices are supporting poultry farmers, although the risks are accelerating just as quickly, [Nan-Dirk Mulder, animal-protein specialist at Rabobank] said. “The demand is there, but the supply is not there,” he said. ‘It is an extremely uncertain market.’”

In his monthly Livestock, Dairy and Poultry Outlook report last week, the USDA’s Economic Research Service (ERS) reported that “The total number of table egg layers lost due to HPAI [Highly Pathogenic Avian Influenza] since February has increased to 39.4 million birds.”

ERS said that “the last HPAI-Status report published by the World Organization for Animal Health (WOAH), covering the period from October 12 to November 10, reported 140 new outbreaks in poultry in Africa, Asia, North and South America and Europe. More than 4.6 million birds died or were shot during the period covered by this report. The report mentions the first case of HPAI in South America (Colombia) since 2002. According to global data collected by WOAH, HPAI tends to be seasonal, with epidemics begin to increase in October, followed by a peak in February. Since the date of the report, other outbreaks of HPAI have been reported, either as recurrent or as a first occurrence. »

ERS added that “the second wave of the HPAI outbreak continued into December, affecting 322,100 commercial meat turkeys in the first week of December alone. Since the outbreak began in February, 8.7 million meat turkeys and 298,760 breeding turkeys have been depopulated.”

Meanwhile, looking at the variables associated with agricultural production costs, DTN writer Russ Quinn reported last week that “Retail fertilizer prices continue to slowly declineaccording to prices tracked by DTN for the second week of December 2022. This has been the general price trend in recent months.”

More generally, Wall Street Journal writers Laurence Norman and Jared Malsin reported last week that “the European Union on Friday implemented a new set of sanctions against Russia that officials hope considerably relieve food safety issues faced by developing and poor countries.

The sanctions deal, which was pushed by EU leaders at a summit on Thursday, came amid intense lobbying by UN Secretary-General António Guterres. He has called a number of European leaders in recent days to persuade them to facilitate the transit of Russian fertilizers through EU ports..”

The Journal’s editors noted that “in recent months, ships carrying fertilizers were held for weeks or denied transit permission by major European ports, such as Rotterdam in the Netherlands, due to concerns about sanctions.

The article said that “as part of Thursday’s deal, agreed after days of wrangling within the 27-nation bloc, it was agreed that national governments can release credits if strictly necessary for fertilizer shipments. Exemptions must be reported to the European Commission, the EU’s executive body, to ensure they are properly applied.

Recent USDA Agricultural Marketing Service (AMS) reports highlight a variety of production costs for Illinois and Iowa:

Data from the Federal Reserve Bank of St. Louis and USDA-AMS show that gasoline and diesel prices weakened: