American club-sandwich lovers have no need to fear the bird flu. For turkeys, it’s another story.
More than 4 million of them across the country have died in the worst-ever U.S. outbreak of highly pathogenic avian influenza.
Even so, the lost supply so far amounts to less than 2 percent of annual production, U.S. Department of Agriculture data show.
“One to two percent isn’t nothing, but in terms of overall supply, I don’t think we’re at a real risk right now,” Will Sawyer, an Atlanta-based vice president of animal-protein research for Rabobank International, said in a phone interview. “This may take some of the growth that the industry was expecting a little bit off the table.”
It started with a few cases in wild birds along the Pacific Coast in late 2014. Now at stake is the roughly $48 billion in poultry and eggs produced annually, government figures show. Buyers in Mexico, Central America and Asia have placed restrictions on U.S. shipments, and Hormel Foods Corp. has said sales may be hurt at its Jennie-O division, which sells turkey burgers and sausages.
Bird flu has been found in more than 60 flocks in Minnesota, the biggest domestic turkey producer. Once the disease is confirmed in a flock, all the birds are destroyed and don’t enter the food system, according to the USDA. There’s a low risk to humans from the strains of the virus that have been detected in the country, the agency has said, citing the Centers for Disease Control and Prevention.
Flocks of almost 24 million U.S. chicken, turkeys and other birds have been infected this year. The disease has been most virulent in Minnesota turkeys and in egg-laying hens in Iowa, the top U.S. producer. The USDA has authorized $330 million in assistance to farmers.
U.S. turkey production was set to rise 4.7 percent this year, so farmers’ plans to expand output will help to cushion supplies. And with export restrictions on American poultry, there will be more turkey, especially dark meat, available for the domestic market. Warm summer weather will help stem the spread of the disease, though it could rebound again in the fall, according to Tom Elam, the president of FarmEcon LLC, an agricultural consulting firm in Indianapolis.
While the supply impact has been minimal so far, there have been some price gains since March, when the disease spread from Minnesota to turkey flocks in six other states. Wholesale prices for boneless, fresh turkey-breast rose to an average $3.3003 a pound in the week ended of May 1, up from $2.9233 in the week to March 6, USDA data show. Costs are still down from $3.45 at this time last year.
Sandwich lovers who balk at higher costs will have plenty of ham available as a lunch-pail alternative. Pork production is expected to reach a record in 2015, and wholesale-ham prices have tumbled more than 40 percent from a year earlier, USDA figures show. Ham traded at 57.05 cents a pound as of Tuesday.
Barns where the bird-flu virus is detected have to stay empty for at least two months to ensure the facilities are cleaned and disinfected, said Steve Olson, executive director of the Minnesota Turkey Growers Association in Buffalo. The governors of Wisconsin, Iowa and Minnesota have declared states of emergency in response to the outbreak, and are making state resources available to help with the cleanup.
“With new cases popping up on a daily basis, the total damage is getting larger,” said Elam of FarmEcon. “We can expect higher egg and turkey prices as a result. How much higher depends on how much worse it gets. Thanksgiving birds may cost a few pennies more this year, but there shouldn’t be a shortage.”