U.S. Bird Flu Outbreak Hits Millions of Iowa Egg-Laying Hens

Updated on

Many of the 3.8 million egg-laying hens in an Iowa flock probably have bird flu as the biggest single outbreak of the virus reported in the U.S. added to concerns that turkey and egg supplies will be hampered by the disease.

“Despite best efforts, we now confirm many of our birds are testing positive” for avian influenza, closely held Sonstegard Foods Co. said in a statement dated April 20. The company said its Sunrise Farms unit close to Harris, Iowa, in Osceola County has 3.8 million hens.

The U.S. in February had 362.1 million egg-laying hens, and Iowa with about 59.6 million is the state with the most, the latest government data on March 23 showed. Commercial turkey flocks with more than 2.5 million birds in eight states have been reported with the virus by the U.S. Department of Agriculture, including more than 425,000 on Tuesday.

“A lot of poultry meat and eggs won’t make it to market,” John Glisson, a vice president of research at the U.S. Poultry & Egg Association, said during a panel discussion Tuesday at a National Chicken Council conference in Cambridge, Maryland. The U.S. and Canada are “implementing plans that have been set up for years” to fight disease, he said.

Hormel Foods Corp., the owner of Jennie-O turkeys, said Monday that annual profit may be eroded because the virus is hampering production. The company’s shares fell the most in six weeks.

Latest Cases

The USDA said Tuesday in a statement on its website that four flocks with a combined 425,300 turkeys were confirmed with the flu in the Minnesota counties of Wadena, Kandiyohi and Cottonwood, and Spink County, South Dakota.

The USDA on Monday “confirmed the presence of highly pathogenic H5N2 avian influenza” in three “flocks” in Wisconsin, Minnesota and Iowa, including 5.3 million chickens in Osceola County. That number reflects the capacity estimate of the Iowa site, Joelle Hayden, a spokeswoman at the agency’s Animal and Plant Health Inspection Service, said in a telephone interview. The agency doesn’t disclose owners of the birds.

Shares of Hormel, based in Austin, Minneapolis, fell 2.3 percent to $55.09 at 4:15 p.m. in New York, the biggest drop since March 10. The stock has climbed 5.7 percent this year.

Tyson Foods Inc., the biggest U.S. poultry producer, fell 1 percent to $38.11 for the fifth straight decline, the longest slump since June. The shares have dropped 4.9 percent this year.

Heightened Biosecurity

Tyson’s chicken business hasn’t been affected by the flu, Worth Sparkman, a company spokesman, said in an e-mail. Heightened biosecurity measures are in place for turkey operations nearest the outbreak, he said.

Soybean-meal futures in Chicago dropped 1 percent, the most in more than a week, amid concern that demand for livestock feed will ebb.

Iowa’s agriculture agency said in an e-mail on Monday that the Osceola County premises detected with the virus have been quarantined. Birds on the property will be “depopulated” to stop the flu’s spread, according to the USDA. Sonstegard is based in Sioux Falls, South Dakota.

Before Monday, avian flu was found primarily in commercial turkey flocks, particularly in Minnesota, the largest U.S. producer.

Western U.S.

The virus was first confirmed in a commercial turkey flock in the central U.S. last month after an outbreak began in wild birds and backyard flocks in the western U.S. in late 2014.

The disease has been found in some states that fall along a Mississippi River migratory route for waterfowl. China has halted all U.S. poultry imports since January, and other nations have imposed bans. Birds in flocks detected with the virus don’t enter the food system, according to the USDA.

The USDA confirmed that more than 180,000 egg-laying chickens in southeast Wisconsin were infected, the state’s agriculture agency said on April 13.

The USDA has forecast that national egg production will rise 0.9 percent this year to 8.41 billion dozen, and prices will average $1.30 to $1.36 a dozen, down from $1.423 last year.

“I’m not worried about current supply of eggs or egg products into the system,” Randy Olson, the executive director of the Iowa Egg Council and state’s poultry association, said Tuesday in a telephone interview. The egg market is “large and complex,” and the Osceola County case involves “a small fraction of the overall production capacity of the U.S., and I wouldn’t anticipate significant consequences as a result.”

The turkey cases reported Tuesday included 301,000 birds in Wadena County; 61,000 in Kandiyohi, the eighth finding there; 30,000 in Cottonwood, the second discovery there; and 33,300 in Spink.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE