The Potential Effects on United States Agriculture of an Avian Influenza Outbreak

Abstract

The U.S. poultry industry has spent considerable resources to date preparing for an outbreak of avian influenza in this country. This research quantifies the potential effects of two alternative avian influenza scenarios on the poultry industry. In addition, this research looks at effects on other agriculture sectors including the loss of feed demand from an outbreak and the impacts on aggregate measures like farm income and consumer food expenditures. The economic sector model maintained by the Food and Agricultural Policy Research Institute (FAPRI) is employed for these scenarios.

Avian Influenza, Public Opinion, and Risk Spillover: Measurement, Theory, and Evidence from China’s Broiler Market

“…(i) Neither poultry infection nor human infection with avian influenza outbreak has a significant spillover to broiler price; public opinion on avian influenza has a negative spillover to broiler price and the effect size of public opinion on broiler price is 1/4 of the effect size of poultry meat consumption in cities and towns 1/5 of chick price 1/10 of live chicken price and 1/3 of pork price. Our finding speaks to the large empirical literature on the impact of avian influenza on the poultry market [11,12,[106][107][108]; however, this literature highlights that public opinion on avian influenza plays a key role in amplifying price risk during second-step flow of communication, whereas avian influenza outbreak alone does not directly cause poultry price risk, suggesting that information and communication should not be overlooked when identifying the effect of epidemic animal disease on macroeconomic outcomes. Moreover, our finding offers a fresh perspective on global livestock market risk right after substantial media coverage.…”

“…Our finding that neither poultry infection nor human infection with avian influenza outbreak has a significant spillover to broiler price is consistent with very few papers such as Han and Xu [99], finding that avian influenza epidemic has no significant impact on broiler price using annual panel data, whereas we differentiate between poultry infection and human infection using long monthly panel data which captures spillover effects much more accurately; however, our finding appears inconsistent with most previous studies that avian influenza epidemic has a significant impact on broiler price [11,12,[106][107][108]. The seemingly inconsistency could be because most previous literature treat avian influenza epidemic as a whole; whereas we decompose avian influenza epidemic into two components: avian influenza outbreak (incident component) and public opinion on avian influenza (information and communication component), to capture the mechanism of avian influenza outbreak, public opinion, and broiler price risk spillover.…”

The Economic Impact of High Consequence Zoonotic Pathogens: Why Preparing for these is a Wicked Problem

“…Additionally, consumers would lose an estimated $900 million in consumer surplus because of higher prices and decreased consumption of poultry meats and eggs. In another model of the economic consequences of an outbreak, Brown et al used the Food and Agricultural Policy Research Institute model (Brown et al 2007). They predicted large declines in chicken production (a decline of 8.8 billion pounds from a baseline of 36.2 billion), and price increases of $0.11 per pound for broilers, $0.19 per pound for turkey, and $0.19 per dozen for eggs from baselines of $0.69, $0.74, and $0.82 respectively.…”

Avian influenza and structural change in the Czech poultry industry

“…Swayne and Kapczynski (2008) show that since 1959, there have been 26 outbreaks or epidemics of the highpathogenicity avian influenza in poultry and other birds of the world, but only four used a combination of focused depopulation and vaccination to eliminate the clinical disease and to maintain the economic viability of poultry production. Many papers deal with different aspects of the disease: expansion of the highly pathogenic avian influenza (Gauthier-Clerc et al 2007), the safety and quality of poultry meat (Mulder 2004), a genetic strategy for the future (Chen et al 2008), the efficacy of vaccination and human health implications (Capua et al 2002;Sarikaya and Erbaydar 2007;Capua and Alexander 2008;Swayne and Kapczynski 2008;Busani et al 2010), modelling the worldwide spread (Colizza et al 2007), or the economic effects of the avian influenza outbreaks (Brown et al 2007;Djunaidi and Djunaidi 2007;Yalcin et al 2010).…”