Peter van Horne is a senior farm economist at the Agricultural Economics Research Institute at Wageningen, the Netherlands. He is a distinguished Poultry Economist, specialised in poultry research projects for the government and industry with particular focus on the economics of animal welfare, environmental protection, animal health and international trade. Dr. van Horne serves as Chairman of the World Poultry Science Association Working Group and is the Economic Analyst and advisor to the International Egg Commission.
During his presentation at the 53rd Franchise Distributor Meeting of Lohmann Tierzucht, he updated attendees on the past and current situation of Avian Influenza in the world and its impact on various poultry aspects, such as on economics, egg prices, consumers’ reaction, international trade, giving suggestions on how to limit this serious global issue.
Peter van Horne started reporting on the recent 2012-2013 Avian Influenza outbreaks in Asia and Mexico, and went on describing the 2014/2015 outbreaks in Europe, Africa and USA. He stressed that Avian Influenza is a global problem and a serious international challenge as the virus is spreading over the world. He also showed that all the viruses are connected and correlated according to various virus flows.
He made 3 examples of the major outbreaks occurred in the Netherlands in 2003, when 15 millions of layers had to be culled on a total of 30 millions; in 2012/2013 in Mexico where 25 millions layers were culled with a dramatic impact on the industry and the market, and last year in the USA, where 34 millions layers were culled.
Huge economic impact of Avian Influenza
This had a severe economic impact on the whole poultry sector. Losses were very high and difficult to estimate.
The first outbreak of Avian Influenza occurred in the Netherlands in 2003, with half of the total of layers culled and 241 farm infected. Direct costs amounted to 290 million, including culling and compensation and were paid by the sector, the Ministry and the European Union. Consequential costs were 500 millions euro, with the indirect ones much higher. The Mexico outbreaks occurred in 2012-2013, with 29 millions culled birds, of which 25 million were layers. Direct costs amounted to 500 US$, while indirect costs were 250 US$.
The most recent USA outbreaks, occurred from December 2014 thru August 2015, resulted in a total of 48 millions culled birds, of which 34 millions were layers and with 223 farms infected, mainly located in the States of Iowa and Minnesota. Direct costs amounted to 700 millions US$, and the government compensation was of 190 millions US$. Consequential direct costs counted for 427 millions US$, while indirect costs involved an 83% loss due to the bans made by the other countries.
Consequences on egg prices
This situation will then reflect on egg prices. Initially we have an increase in prices due to the situation, but they start decreasing as soon as layers are rehoused. Farmers experience a high income on the short-term, followed by will be a period of negative revenue in the long period. After the AI outbreaks, in the USA egg prices have doubled in May 2015 and tripled in August. They are currently suffering a serious shortage in eggs and many European countries are exporting their surplus to the States. This caused of course an increase in egg prices in Holland and Germany.
Peter van Horne gave evidence on how the Avian Influenza virus is spread by wild birds. Last outbreaks in the Netherlands were not so relevant but caused a standstill of 3 days in transport. The control measures imposed to stop any transport of birds in the whole country resulting in high cost sand losses for the poultry sector.
Affecting the International trade
Avian Influenza has also a big impact on the international trade. When Avian Influenza affects a country, all the other States will react banning all import of eggs and poultry products from that country, including cooked meats and egg powder, even if these kind of products are safe as per IEC statement that the pasteurization at 60° inactivates the virus in eggs and egg products. Trade restrictions differ from one country to another and also vary according to the different poultry sectors. This imbalance needs to be solved in the future. The USA are currently very busy to get better international accepted procedures, for trading in poultry products, breeding stock, including zones and regions for managing any safe trade.
AI outbreaks – Lessons learned
We need a system of early detection and warning. Early detection is very important as farmers and vets have to be alerted on symptoms and report them immediately to the government. Early detection is important; to give an example the monitoring of free-range poultry is made every 3 months, as a routine monitoring in the Netherlands.
In addition there should be a direct coordinated action by government and sector, a common plan to control the Avian Influenza. Countries with big farms have to be prepared on how to quickly de-populate while the government should compensate the farmers for their losses. In this sense, it is crucial to have clear rules of compensation. Germany and Belgium have valuation tables agreed by sector with market bird values. This is fundamental to control the AI. Let’s take the situation in Indonesia as an example: here there is no compensation for birds being infected and so there is no way to control the Avian Influenza, because farmers prefer to sell the infected birds instead of reporting the outbreaks. So a right and quick compensation helps control and limit the AI and its consequences.
Peter van Horne concluded his presentation summarizing the hot point of his research as follows:
- HPAI can be controlled by direct culling.
- Farmers short term profits are void by long term losses.
- Poultry supply chains are disrupted, including breeding and hatcheries. The sector experiences huge losses.
- Particular care to the large scale culling with reference to the public opinion in terms of birds’ welfare and ethics.
- Improve the bio-security on farm.
- Implement and promote the international agreements on trade procedures.