Editorial


USDA- APHIS Response to Bovine Influenza Outbreaks

06/16/2024

USDA-APHIS has responded aggressively with a detailed, preliminary epidemiologic investigation of the expanding incidence rate of bovine influenza-H5N1 outbreaks among dairy cattle in Michigan with spillover to egg production complexes.  At the outset, the Agency is to be complemented by deploying highly qualified personnel from the Strategy and Policy and the Field Operations units to Michigan together with participation and support by the National Veterinary Services Laboratories. The team of seven APHIS veterinarians with collectively ten post graduate degrees or board certifications was assisted by a colleague at the Colorado State University College of Veterinary Medicine and with resources and support from the Michigan State Veterinarian.

 

Bovine influenza-H5N1 virus characterized as genotype B3.13 was diagnosed during late March in a dairy herd in Texas.  Subsequent genomic assay suggests that the infection was circulating in dairy herds since late December 2023. Clinically the disease in cows presents as an acute decline in milk production, anorexia and depression in habitus. 

 

Cattle shipped from the index farm were received by a herd in Michigan on March 8th.    Clinical signs were detected on March 20th. This was followed by an episode of high mortality in an in-line egg production complex near Saranac, MI. confirmed as HPAI on April 2nd.  Whole genome sequencing of virus isolates from the Michigan dairy and poultry operations were identified as Eurasian lineage goose/Guangdong, clade 2.3.4.4b, genotype B3.13 with homology among isolates from both the dairy herd and layer complexes.

 

The USDA team published their preliminary findings on June 9th and circulated the manuscript in the form of a report that encapsulated epidemiologic findings including recommendations for prevention*.  The report comprised observations made on 15 dairy herds and 8 poultry flocks covering the period March 29th through May 16th.

 

The principal epidemiologic findings included: -

  • Almost a third of dairies employed workers who owned livestock or poultry at their personal residences.
  • There was extensive commonality of employment among dairy herd workers.  Twenty percent of those employed and 7 percent of their family members worked with dairy herds other than their principal location.
  • Of considerable significance to interspecies transmission, seven percent of workers on the affected dairies also worked on poultry farms and 13 percent of workers on affected dairy farms had family members working on poultry complexes.
  • With respect to the dairy operations, 62 percent used shared vehicles to transport live cattle but only 12 percent of responders recorded decontamination after delivery.
  •  All dairy farms had regular visits by veterinarians, consultants and contract haulers with evident direct contact among herds.  Almost half of the dairy herds used a contractor to dispose of dead animals with a history of removal within 30 days of the emergence of clinical signs in 40 percent of the affected herds.
  • As with all dairy operations, milk haulers visited operations at least daily.

 

The epidemiologic evaluation based on a questionnaire requiring participation of up to two hours by a responsible reporter and follow-up investigations and an environmental sampling form the basis of the publication.

 

The major conclusions of relevance to the outbreak included: -

  • Introduction of the virus into Michigan herds by infected but apparently asymptomatic cattle originating in Texas.
  • Evident inter-herd and inter-flock dissemination of H5N1 by movement of personnel, lactating cows and vehicles, without appropriate operational biosecurity.
  • HPAI H5N1 genotype B3.13 was detected in pigeons, a starling, cats, raccoons, opossums and foxes at five of the dairy farms surveyed and on one participating poultry farm.  The question arises as to whether the free-living resident passerine birds introduced the infection by viral shedding or whether they became infected by contact with a contaminated environment.  Cats are highly susceptible to infection and demonstrate clinical signs and death. They may be involved as a ptential link between wild birds and cattle.  Cats could also have become infected by consuming discarded raw milk from infected cows.
  • Movement of personnel and their families among dairy and poultry farms was considered to be significant in the context of the extension from the initial cases in dairy herds to the catastrophic loss involving 4.8 million hens among six farms under common ownership.  It is understood that workers were not required to disrobe and shower before donning company-provided outer clothing.  The investigation confirmed that at least 20 employees of three poultry flocks worked weekend shifts at two dairy farms.  The report also confirmed that shared housing could have contributed to dissemination of infection in the case of three poultry farms and two dairy herds.

 

Recommendations to prevent infection included: -

  • Maintaining closed herds although 9 out of 15 farms that were evaluated did not receive animals within 30 days of their respective outbreaks.
  • Surveillance of both individual animals by PCR assay of respiratory swabs and pooled samples of milk is now mandated before interstate movement of lactating cows.  Clearly, this is inadequate since heifers could transmit infection and individual states should be required to impose a similar restriction on intra-state movement.  Recommendations in the Secure Milk Supply Enhanced Biosecurity Plan should be followed. 
  • The Michigan Department of Agriculture and Rural Development issued a Determination of Extraordinary Emergency-HPAI Risk Reduction Response Order on May 1st requiring adherence to acceptable operational biosecurity.  It is noted that procedures to limit transmission of infection require structural biosecurity including facilities to decontaminate personnel vehicles and equipment which, if absent, invalidates operational biosecurity.
  • It is a longstanding practice within the poultry industry to require personnel to avoid visiting other poultry farms or maintaining poultry at their homes.  The industry has, however, not considered swine or dairy operations as a possible source of infection.  Even in the absence of a prohibition of contact with other farms, introduction onto egg production complexes may have been avoided by decontamination of personnel using available showers.
  • Since the early April outbreak in the Michigan egg production complex, virtually all poultry producers have amended their personnel requirements to include a ban on working on any other livestock operation with some companies extending this restriction to family members.  Since declarations are voluntary and impossible to verify, disrobing, showering and donning company-provided outer clothing and PPE is considered to be an essential preventive measure.

 

 

The report prepared and published by USDA-APHIS illustrates how a field investigation with appropriate laboratory support can be implemented within a short period, given resources but more important with motivation and direction by senior administrators. Since the onset of the current epornitic in 2022, APHIS has functioned to diagnose outbreaks of avian influenza and to depopulate flocks. The APHIS concentration has been an attempt to eradicate a seasonally and regionally endemic infection introduced and disseminated by migratory waterfowl that constitute reservoirs and shedders. The Agency has neglected epidemiologic studies that could have contributed to recommendations for prevention. Only two superficial and flawed reports were belatedly published, based on telephone-administered surveys one year after the 2022 outbreaks in diverse egg production and turkey grow-out farms respectively. Information including the critical determination of whether HPAI can be transmitted, albeit it over short distances, by the aerogenous route would have been helpful along with other recommendations based on logical assumptions and more structured and focused investigations. 

 

The rapid response by APHIS, with real-time recommendations relating to H5N1 outbreaks in Michigan demonstrate that the Agency is capable of responding to a disease emergency.  Why was a similar approach not adopted in 2022 following the emergence of HPAI collectively responsible for subsequent depopulation of close to 90 million commercial poultry? Does APHIS operate according to the Animal Farm ethos of Four legs good-two legs bad? There is a lot that the poultry industry needed to know 50 million or so birds ago!

 

*Nguyen, T-Q., et al.  2024 Highly Pathogenic Avian Influenza (H5N1)-Michigan Dairy Herd and Poultry Flock Summary BioRxlv.org.doi.org/10.1101/2024.05.01.591751.

 


 

Responsibilities of Employers with Respect to HPAI

06/12/2024

With the emergence of bovine influenza-H5N1 in dairy herds and ongoing outbreaks of HPAI in poultry flocks, legal experts are examining the implications of workers contracting the infection. This is notwithstanding the paucity of cases and mild symptoms to date. In a review authored by Charles Palmer of the law firm Michael Best and Freidrich, obligations of employers are considered with respect to the possible emergence of a zoonotic infection.

 

Section 5 (a) 1, the General Duty Clause of the Occupational Safety and Health Act places an onus on employers to respond to obvious hazards that may impact workers.  At the present time, it is not apparent that HPAI H5N1 in either poultry flocks or dairy herds is directly transmissible to workers despite three cases diagnosed and with one case associated with depopulation of a flock infected with HPAI.  All cases were mild and there was no evidence of person-to-person transmission.  In terms of the General Duty Clause, employers will be held to standards as issued by the Centers for Disease Control and Prevention.  Current recommendations include: -

  • Avoiding direct physical contact with sick birds and animals.  This is obviously inappropriate where crews are used to depopulate flocks diagnosed with HPAI. The situation is unclear with respect to large herds in which there is a low prevalence of infection. Is it permissible to segregate affected cows and designate trained personnel to their care?

 

  • Wearing appropriate personal protective equipment (PPE) that should be supplied by the employer.  This is an area where employers could be subject to criminal and civil  action in the event of failure to either supply PPE or train workers in their effective use.

 

The OSHA PPE standard (29CFR 1910.132) requires: -

 

  • Disposable or non-disposable and fluid resistant coveralls and depending on circumstances, waterproof aprons and head gear.
  • NIOSH approved particulate respirator with a minimum of N95 filtration.
  • Properly fitted, unvented safety goggles or a face shield in the event of splashing of biologic fluids onto the respirator.
  • Rubber footwear with sealed seams that can be sanitized.
  • Disposable or non-disposable head covers.
  • Disposable or non-disposable gloves.

 

Employees should be trained in donning and working with PPE.

 


CLS-Seqirus Vaccine Plant NC

OSHA sanitation standard (29CFR 1910.141) requires collection and appropriate disposal of both solid and liquid wastes in such a manner as to prevent direct contact with eyes and respiratory surfaces.  The sanitation standard requires bathrooms with hot and cold running water and soap and cloth or paper towels.  The requirement includes “air blowers”.  These units are potentially capable of disseminating virus particles entrained on dust and should be eliminated from the sanitation standard.

 

The poultry industry has gained sufficient and bitter experience in the possible location and timing of outbreaks and accordingly, structural and operational biosecurity is practiced and is  intensified under conditions of high risk.  The situation with respect to the dairy industry is less certain. More than 90 herds have been diagnosed with bovine influenza-H5N1 and the disease is now present in 12 states.  In the absence of a structured surveillance program, the actual extent of infection among dairy herds and possibly beef herds is unknown.

 

During the 2020 COVID outbreak, workers in red meat packing plants and poultry processing facilities were vulnerable to infection based on proximity of workstations and working in cold, high-moisture environments. With confusion over county and state officials to order plants closed and with plummeting hog and beef throughput on April 28th 2020 a Presidential Executive Order was released in accordance with the Defense Procurement Act mandating plants to continue operation. This Order extended indemnity to employers against claims by sick workers provided that facilities were operated in accordance with CDC standards.  At the time, these were based on human influenza and involved masking, distancing and monitoring of health. 

 

In the absence of similar indemnification, employers will be vulnerable to both civil and criminal action in the event of exposure of workers to H5N1 in the absence of appropriate protective measures.

 


Cell-based vaccine production CSL-Seqirus

Should a zoonotic strain of H5N1 emerge, protective vaccination will be deployed from a bulk stock of 5 million doses currently being packed by CLS-Seqirus in North Carolina. The E.U has ordered vaccine from the Company with delivery scheduled over a four-year period. Finland intends offering vaccine to workers and farmers in contact with dairy herds, mink and poultry in addition to employees of packing plant, veterinarians, laboratory personnel and first responders.

 

As a simple precautionary measure, all workers in contact with poultry, dairy herds and other at- risk personnel and their families should receive the annual multivalent influenza vaccine when available in the fall. This will preclude an extremely rare but possible recombinant event between a human influenza strain and a poultry or livestock strain with the potential for emergence of a new virulent zoonotic virus.


 

Renewed Interest in Food Irradiation - A Retrospective Analysis of Foodborne Outbreaks

05/30/2024

The Centers for Control and Prevention (CDC) has demonstrated that implementation of food irradiation for eligible products over the period 2009 through 2020 would have potentially reduced the incidence of foodborne outbreaks caused by susceptible bacteria. In the retrospective CDC study, 482 foodborne outbreaks were examined with 155 attributed to a food product eligible for irradiation.  Chicken (34 percent of the eligible foods) and beef (20 percent) were the leading food products eligible for irradiation that were obviously contaminated at the time of purchase.  The CDC report noted, “ the illnesses, hospitalizations and deaths associated with outbreaks linked to irradiation-eligible food might have been prevented or reduced had those foods been irradiated.  Radiation treatment eliminates pathogenic microorganisms.”

 

During the 1980’s and 1990’s, food irradiation was promoted as a solution to foodborne infection caused by Salmonella, Campylobacter, E.coli (STEC) and Listeria.  Unfortunately, negative publicity and a reluctance to introduce the technology prevented adoption.  Isotopic irradiation using cobalt60 is suitable to destroy foodborne bacteria in bulk-packed dense food products.  Cobalt60 irradiation plants are expensive and depend on high utilization and throughput to offset fixed costs. With high demand and appropriate logistics, the cost of irradiation treatment is extremely low.  It is a matter of record that a high proportion of medical disposables are irradiated using cobalt60 in dedicated free-standing plants. 

 

Recently electron beam pasteurization has become available as a more practical alternative to isotopic irradiation.  Similar to hospital x-ray installations, electron beam units can be installed in poultry production and food packaging plants without the restraints and costs associated with isotopic irradiation.  Electron beam units can be switched on and off to comply with plant operation and are ideal for small food items including IQF portions and small packages of fruit and vegetables.

 

The U.S. Food and Drug Administration has approved a range of foods for irradiation including meat, poultry, shell eggs and spices, Unfortunately due to concerns over consumer resistance there has been minimal application other than for approximately one-third of imported spices.

 

For food irradiation to be accepted, an intensive program of consumer education will be required.  The major points to be conveyed are that nutritional content is not affected by the treatment, there is no residual radioactivity in the product, non-spore forming bacterial pathogens are inactivated if the process is carried out in conformity with FDA standards.

Attempts are being made to declare a wide range of Salmonella as adulterants in chicken and turkey products.  Given current pre-harvest and processing technology, it is impossible to reduce the probability of contamination to levels that would support existing production with standards approximating near-zero tolerance without an effective kill step.  Application of irradiation applying electron beam treatment of tray-pack or IQF products could be achieved at costs at or below one cent per lb.

 

If electron beam treatment is introduced, there will have to be complete transparency in labeling accompanied by promotion by federal agencies with assurances of safety and efficacy and above all endorsement by public health agencies and consumer groups.

 

Given that we are still contending with opposition against pasteurization of milk introduced over 150 years ago, obtaining acceptance of food irradiation, even applying electron beam treatment, analogous to x-rays will require a coordinated informational program.


 

USDA to Fund Disease Prevention Projects

05/25/2024

The USDA will assign $22.2 million to the Animal and Health Inspection Service to implement 81 projects in 48 states.  Activities will be conducted by universities, industry organizations and state veterinary diagnostic laboratories. Funds will be assigned from the National Animal Disease Preparedness and Response Program funded in 2018.

 

Jenny L. Moffitt Under Secretary for USDA Marketing and Regulatory Programs noted, “Bolstering animal disease preparedness is critical because these diseases devastate livestock and hardworking farmers whose animals are affected and threaten America’s access to safe, healthy, affordable food.”

 

It is hoped that APHIS will assign resources to an epidemiologic investigation of avian influenza.  Since 2022, over 80 million commercial birds have been depopulated with only lip service to epidemiologic studies that could provide meaningful improvements in prevention and control.  The Agency continually and justifiably promotes “biosecurity” as a principle but without considering specifics relating to structural and operational biosecurity. APHIS fails to relate the probability of exposure with various types of commercial farms and to consider the structure and organization of the various industry segments.  From direct personal contact with middle-level federal Veterinarians, it is evident that epidemiologic studies leading to prevention have been largely downplayed with a concentration on the reactive cycle of detection, depopulation, quarantine and decontamination.

 

APHIS continues with a policy of attempting to eradicate a disease that is both regionally and seasonally endemic.  This King Canute approach draws heavily on Commodity Credit Corporation funding. This is costly to public agencies, producers and ultimately consumers.

 

Projects that should be considered include:

 

  • Confirmation of aerogenous transmission of avian influenza virus.

 

  • Determining the duration of shedding of virus by migratory waterfowl and domestic birds following infection.

 

  • Persistence of virus in soil and water over a range of conditions as influenced by temperature, humidity and intensity of exposure to sunlight on soil and impervious surfaces.

 

  • Establishing risk factors for introduction of infection onto large egg production complexes in addition to contractor broiler, turkey, and breeder farms using real time field and molecular epidemiology.

 

  • Expedite the evaluation of available commercial avian influenza vaccines and formulate a policy for their deployment.

A number of legislators including Senator Chuck Grassley (R-IA) have developed a sudden interest in H5N1 now that it has emerged in the dairy industry.  Senator Grassley is correct in encouraging communication among federal agencies involving specialists in virology, epidemiology, wildlife biology and other disciplines necessary to develop integrated programs to control catastrophic diseases.

 

Parochial concerns as expressed by the Commissioner of Agriculture of the state of Texas dissuading cooperation into investigations into the source and prevalence of bovine influenza-H5N1 are unconstructive. Resistance to cooperation with federal agencies may delay prevention and spread and contribute to the remote possibility of emergence of a strain of H5N1 pathogenic to humans and capable of person-to-person spread. In the unlikely event of emergence of a zoonotic form of H5N1 he and those who oppose scientific investigation and reality will have a lot to answer for. The Commissioner will be removing his ostentatiously large and pristinely white trademark Stetson at numerous funerals—but let us work together to obviate this eventuality. We are not China.  We face reality. We do not suppress science. We work to achieve the best possible outcome when faced with challenges of disease and climate. Or do we? Naah!


 

Bovine Influenza Highlights Danger of Raw Milk Consumption

05/21/2024

The recent emergence of bovine influenza-H5N1 now diagnosed in 54 herds in 9 states, creates a risk of infection from consuming non-pasteurized milk.  Heat treatment during pasteurization effectively destroys most viruses and non-spore forming bacterial pathogens. To date there is no indication that either consumers of fluid milk or eggs have been impacted by bovine influenza-H5N1 or the avian counterpart. The fact that eggs have not been subject to consumer resistance following outbreaks of HPAI is attributed to prompt cessation of distribution from affected complexes and that eggs are cooked in home and institutional kitchens providing a justified sense of security. 

 

Predictably, CDC has warned against drinking raw milk.  From 1998 to 2018, the CDC documented 200 outbreaks directly attributed to raw milk, resulting in 2,600 cases and 225 hospitalizations.  Prior to mandatory pasteurization for milk shipped interstate, 25 percent of all cases of foodborne infection could be traced to milk and dairy products.  Currently, milk and dairy are responsible for slightly less than one percent of foodborne infections.  It is calculated that one percent of the population regularly consume non-pasteurized milk representing 0.006 percent of all fluid milk consumed. This minute quantity is responsible for a disproportionate number of milk-borne infections.

 

Demand for raw milk soared during the COVID period when it became a freedom issue as a counter to recommendations for masking and vaccination to control the emerging infection.  A raw-milk producer in California noted, “Anything that the FDA tells consumers to do, they do the opposite.” 

 

The demand for raw milk has surprised food safety experts.  Dr. Donald Schaffner of Rutgers University characterized that the demand for raw milk is “absolutely stunning” and Dr. Alex O’Brien, Coordinator for Safety and Quality at the Center for Dairy Research, stated, “I liken drinking raw milk to playing Russian roulette.  The more times people consume it, the greater the chance they will get sick.”  Notwithstanding reasons and scientific advice, social media is replete with false claims of nutritional superiority for raw milk and anecdotal reports of freedom from infection.  The very young are vulnerable to bacterial infections including STEC that is associated with hemolytic uremic syndrome.  Allowing pre-teens to consume raw milk is a form of abuse.

 

Dr. Matthew Motta of Boston University attributes the demand for raw milk as a manifestation of “partisanship, politic ideology, religion and cultural values” and not simply due to availability or ignorance. Dr. Motta recommends that federal health agencies should respond with appropriate advice and scientific fact on social media promoting the safety of pasteurized milk.  Unfortunately, in a polarized nation with web-disseminated misinformation and conspiracies, consumers have made up their minds and no amount of web postings will sway their convictions.


 

Epidemiologic Evaluation of Bovine Influenza Apparently Obstructed by States

05/14/2024

From a statement issued by Dr. Nirav Shah, Principal Deputy Director of the Center for Disease Control and Prevention (CDC), there is unanimity between his agency and USDA but state agricultural departments and individual dairy operations are obstructing investigations relating to the prevalence of infection in herds and workers.

 

With an emerging infection such as bovine influenza-H5N1 it is critical to determine as rapidly as possible the prevalence rate and geographic extent of the infection.  Both field and molecular data must be obtained and analyzed to ascertain the rate of spread and modes of infection in order to implement counter measures. Epidemiologic data can be used to predict the progress of the disease in cattle and genomic evaluation can assess the risk of extension to the human population.

 

The CDC, with their focus on human health, is obviously concerned over the possible incidence rate of H5N1 infection among workers and should be allowed to conduct surveys.  Texas Agriculture Commissioner Sid Miller stated, “They don’t need to do that, it’s overreach.”  With respect to Commissioner Miller, he is in no position to comment on the epidemiologic realities of emerging disease and apparently is oblivious to the potential of extension to humans, although only one diagnosed case has been documented.  Anecdotal reports by veterinarians visiting affected dairy herds suggest that individual workers demonstrated influenza-like symptoms including conjunctivitis.  Colorado with only one case is following 70 workers to establish infection and possible transmission to contacts.  Based on data from the CDC only 220 farm workers have been monitored for symptoms suggesting that only 150 workers have been evaluated among eight states where outbreaks have occurred.  Texas with the most cases among dairy farms reported has only tested 20 workers with clinical signs and the results of diagnostic procedures have not been released. PCR assay results are available within 24 hours!

 

It is now five weeks since the index case of bovine influenza was diagnosed. Preliminary studies on the sequencing of isolates of H5N1 belatedly released by USDA-APHIS suggest that the disease has been present in dairy herds since late December 2023.  To date there has been no structured evaluation of H5N1 prevalence among dairy herds on a national basis and the appropriate epidemiologic surveys on workers have not been conducted. This is despite the presence of RNA consistent with H5 influenza virus in both milk and wastewater especially in areas where outbreaks in dairy herds have occurred.

 

The World Health Organization has designated H5N1 avian influenza virus as a potential pandemic strain.  The Agency has urged surveillance including documentation of outbreaks in avian and now mammalian species and the WHO maintains a database of outbreaks and the library of genomic sequences. 

 

The parochial but understandable concern of state departments of agriculture as expressed in their desire to protect the milk industry is self-evident.  This standpoint obviously conflicts with the greater need to understand the epidemiology of bovine influenza-H5N1 and to develop a national program to limit infection.  Of greater concern is the possible extension of a mutant virus to workers and then to the general population.  The distribution of PPE is perhaps an initial step in preventing infection but will be difficult to implement given the underlying deficiencies in structural and operational biosecurity in comparison to egg-production complexes. Practical and cultural issues exist with the deployment and use of PPE that requires availability and acceptance.  We need to know the numbers of workers that may have been infected from an affected herd, the duration of the clinical phase and of viral shedding.  Surveillance based on molecular epidemiology including gene sequencing will be critical to timeously detect mutations that may contribute to infection of humans and person-to- person spread. It is understood that up to $98 million will be distributed by the USDA to provide 3,500 dairy farms with up to $28,000 to “contain the spread of the virus between animals and humans and for testing milk and animals for the virus” This commentator suggests that grants should be conditional on cooperation with federal agencies with respect to herd and worker surveillance.

 

We are not China.  We should not suppress necessary epidemiologic investigations or the data collected.  Bovine influenza-H5N1 and its avian counterpart will not simply go away, irrespective of the intensity of hope, denial and prayer. Fortunately it appears that the risk of contracting H5N1 from direct contact with cattle is minimal but this assumption is based on the current circulating virus and inadequate surveillance.  Pasteurization obviously destroys the virus that is secreted into milk from infected mammary tissue. A mutation in the viral genome could profoundly alter present circumstances and could result in widespread infection as with “swine flu”.  Dr. Shah notes, “We have all seen how a virus can spread around the globe before public health is even had a chance to gets shoes on, that’s a risk and one we have to be mindful of.” It is not what we know that has the potential to hurt the industry and population—but what we do not know.

 

The dairy industry, state agriculture organizations, and federal agencies including USDA-APHIS and the CDC should cooperate according to a coordinated and agreed plan to determine the extent of bovine infection following “One Health” principles.  Currently the risk of mutation to a strain capable of infecting humans is very low based on accumulated knowledge. We are however in a situation of confronting a condition with a low probability of an adverse outcome for humans but with an extreme potential for morbidity and mortality and devastation of the Nation’s economy in a worst case scenario.  Let us learn from our unfortunate experience with COVID from 2019 onwards and not underrate the significance of the infection at a stage when practical control is still possible.

 


 

NCC Expresses Reservations Over Vaccination Against HPAI

05/06/2024

It is becoming increasingly evident that the U.S. poultry industry is divided on the desirability of preventive vaccination against Highly Pathogenic Avian Influenza. Given the duration and severity of the H5N1 epornitic that has persisted in seasonal waves of incidence since 2022, both turkey and egg production segments have been disproportionately affected.  In contrast there have been limited losses among broiler breeder and growing farms. The ongoing epornitic has resulted in depopulation of close to 90 million birds with 75 percent comprising commercial egg laying flocks or pullets, 16 percent turkeys and 7 percent broilers and broiler breeders.

 

At issue is the potential impact of even limited regional and sector vaccination on the export of broiler leg quarters.  The prevailing perception is that introducing any program of preventive vaccination would be an acknowledgement that the infection is endemic resulting in a number of importing nations imposing wide restrictions on importation.  The reality is that HPAI is effectively regionally and seasonally endemic in the U.S. given that both migratory birds that introduce infection and now many domestic species both serve as reservoirs and disseminators of the virus. Even the most extreme levels of biosecurity are ineffective in preventing introduction of infection based on anecdotal and scientific evidence that infection can be transmitted over short distances by the aerogenous route.  Since the 2022 epornitic, the USDA-APHIS has followed an outdated and anachronistic policy of eradication.  This is clearly a fallacious approach, inappropriate to a disease subject to seasonal introduction and with domestic wildlife reservoirs.

 

Adaptation of H5N1 to mammals with animal-to-animal transmission is evidenced by outbreaks in farmed mink and marine mammals during 2023.  The recognition that the infection is now present in the U.S. dairy industry raises concern for further changes in the H5N1 genome with the potential for the emergence of a zoonotic strain.

 

Given that highly pathogenic avian influenza caused by H5N1 is now a panornitic present on six continents, has changed attitudes towards preventive vaccination. The World Organization of Animal Health (WOAH) has accepted this modality as an adjunct to prevention along with biosecurity and quarantine.  The important question is whether limited vaccination in the U.S. would seriously impact export of leg quarters representing 97 percent of broiler exports.  Given the limited number of nations receiving U.S. exports, and the fact that many of these nations have endemic infection suggests that the restraints on exports may be overstated. It is clear that many nations have and will continue to use avian influenza as either a protective measure for domestic industries or for political purposes.  China applies vaccination against endemic HPAI but imposes prolonged restrictions on U.S. counties and states with diagnosed infections. This nation will act in their own interest irrespective of international agreements or scientific reality.  Many importing nations would be willing to limit restrictions to the county level.  Others might accept a certification program by which complexes or flocks of origin could be demonstrated to be free of virus by PCR assay prior to harvesting.

 

The NCC is justified in continuing to quantify the effect of trade restrictions although in reality vaccination would result in probably less disruption than is currently imposed.  The contention that vaccination would not eradicate HPAI is well recognized, but it must be accepted that the infection is now regionally and seasonally endemic.  The statement that vaccination “masks the presence of HPAI” is valid but flocks can be certified free of infection using PCR technology.

 

The NCC statement that “We currently support USDA and APHIS stamping out policy to eradicate the virus is essentially fallacious and self-serving since this is an unachievable objective and reflects the thinking of the 1990s.  The NCC encouragement of APHIS to “work with our trading partners to ensure that should a vaccination strategy be developed, we can continue to feed the world with poultry products” represents a departure from the ‘no-vaccination ever’ message.  The NCC is justified in its reservations over HPAI vaccination with respect to export and trade since this is of vital economic importance to the industry that must market 15 percent of RTC volume in the form of leg quarters, an undifferentiated relatively low-priced commodity.

 

The recent article by Mike Brown, President of the NCC, in a Delmarva publication indicates a more reasoned approach to vaccination that recognizes that the infection cannot be eradicated through ongoing depopulation of flocks.  Effective biosecurity (as opposed to the ‘make-belief’ version practiced) will not provide absolute protection against infection given the reality of aerogenous transmission.

 

Restriction on trade in poultry products as the result of vaccination may be influenced by future events including: -

 

  • The unfortunate but likely possibility of introduction of HPAI into the U.S. broiler industry, resulting in significant losses.
  • Recognition of HPAI among commercial flocks in Brazil.
  • Extension of H5N1 or other strains to workers on U.S. livestock farms, processing and packing plants and their contacts.
  • Availability of effective AI vaccines for mass application.

 

The “softening” of resistance by the broiler industry to preventive vaccination is encouraged and reflects an appreciation of the realities of the disease, the widespread distribution, financial impact and zoonotic potential. The NCC and USAPEEC should motivate the lifting of trade barriers against vaccination through representations to the WOAH, the International Poultry Council and the International Egg Commission to facilitate controlled and monitored immunization of egg-production and turkey flocks in U.S. areas of high risk.


 

USDA-APHIS Belatedly Releases Incomplete AI Virus Sequence Data

04/24/2024

On Sunday, April 21st, USDA-APHIS released 239 genetic sequences relating to H5N1 isolates.  The data was released to the National Library of Medicine database as raw sequence data (FASTQ files).  The sequences lacked essential supporting information that can be used by molecular epidemiologists to ascertain the sources of the isolates and how they have evolved over time.

 

An alternative database, the Global Initiative on Sharing All Influenza Data (GISAID), was established by scientists under the guidance of the World Health Organization to monitor the emergence of both human and animal influenza strains. The objective was to identify viruses with zoonotic and pandemic potential.  Information posted to GISAID contains consensus sequences that have been refined and are devoid of contamination and errors. These sequences are supported by the origin of the sample, species and the location and time of collection. The data posted by USDA identifies ‘time’ as 2024 and ‘location’ as USA.

 

In late 2019, scientists and regulatory officials worldwide condemned China for reluctance to release sequences and detailed information on SARS-CoV-19 and their subsequent removal of molecular biological information from data sets that they maintained.  Are we not in a similar situation?  Is this due to institutional ignorance since deliberate obfuscation could never be contemplated by a U.S. agency!  Why was USDA-APHIS or ARS holding 239 sequences when the H5N1 HPAI epornitic has persisted since 2022?

 

Notwithstanding the paucity of data released, molecular epidemiologists were able to draw some conclusions.  Dr. Michael Worobey, at the University of Arizona, was able to determine that the most recent common ancestor of the H5N1 isolates from dairy cows was introduced into herds during mid- to late December 2023.  This has profound epidemiologic implications suggesting widespread infection, notwithstanding the apparently low morbidity rate in infected herds.  The larger question relates to the extent of H5N1virus in U.S. dairy herds given that asymptomatic cows have yielded positive nasal swabs.  The revelation that PCR assays on commercial milk have yielded viral RNA, but not live replicating virus in 58 out of 150 samples from ten states is not unexpected and suggests widespread infection.  Epidemiologists affiliated to GISAID are eager to access curated sequences to continue studies and to determine the potential for emergence of a human pandemic strain.

 

On the positive side, only one individual working with dairy cows who demonstrated conjunctivitis has yielded H5N1 virus, but with no evidence of human-to-human transmission. Preliminary studies confirmed that the H5N1 virus isolated from the dairy farm in Texas was similar to the virus isolated from a dairy farm in Michigan that received animals from the index case.  The virus isolated from the extensive outbreak in laying hens in Michigan and implicated in a preliminary field investigation of the source of infection conformed to a common cluster.  Enigmatically, the genetic sequence from the human case on the Texas dairy farm was sufficiently different from the similar wild bird, cat, cow and chicken sequences suggesting a different origin of infection.  Evidently the worker did not contract infection from contact with cows on the index dairy herd in Texas.  Dr. Tom Peacock, affiliated with the U.K. Pirbright Institute, noted, “The virus is basically too distant a cousin to be connected directly to the outbreak which either means it is either from a second spillover or that there was an early bifurcation of the cattle sequences.” 

 

Susceptibility of mammals to the avian strain of H5N1 has been known since mid-2023 given isolation from scavenging mammalian species in North America including skunks, raccoons, pumas, coyotes and bears.  Emergence of the infection in farmed mink in Spain and in marine mammals was clearly associated with animal-to-animal transmission.

 

Under the aegis of the Pan-American Health Organization, scientists in Latin America have made available sequences from marine mammals and migratory birds. They have organized meetings to review findings and to consider contingency plans in the event of an emergence of a zoonitic strain of H5N1.

 

EGG-NEWS has previously criticized USDA-APHIS for their pedestrian approach to HPAI , comprising a repetitive sequence of diagnosis, depopulation and decontamination. Failure to assign adequate resources to field and molecular biology and an apparent reluctance to aggressively investigate and publish on the epidemiology of avian influenza represents a grievous and ultimately costly omission. The egg-production and turkey segments of the poultry industry have experienced an ongoing epornitic extending over two years and involving depopulation of over 70 million commercial birds. This has been costly to the public sector, to producers and ultimately consumers.

 

This criticism is now extended to a lack of transparency with respect to releases on the molecular epidemiology of HPAI and publication of annotated sequences.  Dr. Rick Bright who led the Biomedical Advance Research and Development Authority from 2016 to 2020 stated, “It’s so critical that the U.S. Government should be as transparent as they can right now and share sequences and all of the data so the world can look at it and make their own risk assessment and start making their own vaccines if they need to.”  Bright continued, “What would we say if this particular virus did get out of control?  Would we look back on these last two or three months and say I wish we would have done something else?  We must share all these sequences so the world can get ready.” 

 

Dr. Worobey noted, “There is a whole community of colleagues around the world who have a lot of experience with influenza and often can see things or conduct analyses that might show something that others have missed.”  In the unfortunate event that a zoonotic strain emerges from the current circulating H5N1 in free-living avian and mammalian species or in commercial flocks and herds, administrators at USDA-APHIS will have a lot on their collective conscience. This is attributed to their unconscionable lack of transparency and their inactivity in failing to aggressively investigate the epidemiology of HPAI. The U.S. poultry and dairy industries, consumers, and ultimately taxpayers deserve better.


 

Rising Energy Costs to Offset Trend in Deflation?

04/23/2024

Following eleven successive increases in the 10-year benchmark interest rate the FOMC engineered a reduction in U.S. inflation as measured by the Consumer Price Index (CPI) from 8.9 percent in June 2022 to 3.5 percent in March 2024.  The increase in the benchmark interest rate did not result in unemployment and many influential economists predict a “soft landing”. 

 

Despite the substantial increase in the inflation rate, attaining an elusive FOMC inflation target of approximately 2.0 percent will be difficult to accomplish.  At the beginning of year, the market anticipated as many as six reductions in interest rates.  The five consecutive pauses suggested caution and based on CPI, wage and employment data there will probably be only one or two reductions of 0.25 percent each in 2024 and not before late summer.  Federal Reserve Chairman Powell, supported by Federal Reserve Governors, has stated in Congressional testimony and in public statements that decisions on reducing interest rates would be based on data with demonstrable progress in reducing inflation.

 

Energy is a major contributor to “sticky” inflation having increased by close to 25 percent since December 2023.  Although turbulence in the Middle East could have been a significant factor in the increase, effectively disciplined restriction in output by OPEC+ has maintained price above $80 per barrel.  As noted in successive weekly Economy, Energy and Commodity Reports in EGG-NEWS, the November reduction in OPEC+ output of 2.2 million barrels a day was extended through June representing two percent of global production.  Non-OPEC output including Brazil, Angola and the U.S. has in large measure moderated the effect of the OPEC+ constraints. OPEC+ has learned that high oil prices reduce demand, and the Cartel has acquired the skill and discipline to fine-tune supply to regulate price and to disfavor alternative sources of energy.

 

Restoration of the economies of the E.U. and China, concurrent with increased industrial activity, will however create further demand for crude and other forms of non-renewable energy with valid predictions of a rise in price.  Despite the reciprocal mutual attacks by Israel and Iran during the current month, the Brent Crude benchmark is still below $90 per barrel compared to a high of $95 in August 2023 and a recent low of $75 per barrel during November 2023.  Economists predict that if OPEC cuts hold, Brent Crude could reach $100 per barrel by mid-summer attributed to increased demand. 

 

Unknowns relating to future oil supply and prices will be influenced by possible reaction by Iran.  Obviously increased sanctions against the regime will evoke a response either by the rulers of that nation or their surrogates.  Interdicting transport of crude through the straits of Hormuz or additional action by Houthi rebels in the Bab-el-Mandeb strait could drive oil above $100 per barrel.  This would result in international action including pressure by China, the major purchaser of Iranian oil.  Given recent history, it is anticipated that Brent Crude will fluctuate between $85 and $90 per barrel though summer. Availability of domestic supply in the U.S. will probably constrain WTI crude at between $82 and $87 per barrel but higher prices will favor increased exports.

 

Since the price of oil is closely correlated with corn and other agricultural commodities, any escalation in price has implications for livestock production. Higher prices for diesel and gasoline will limit consumer spending with a negative effect on the earnings of food producers, distributors and retailers. According to the American Automobile Association

 

U.S. consumers paid on average, $3.66 per gallon for regular grade during mid-April.

 

 It is axiomatic that the pump price of gasoline will influence the November election with high prices attributed to the incumbent party, irrespective of justification.


 

PEAK 2024 an Outstanding Success

04/16/2024

PEAK 2024 organized by the Midwest Poultry Federation is now well established in the Minneapolis Convention Center that provides more exhibition space, meeting rooms and hotel accommodation that the previous St. Paul location.  The trade exhibition consistently attracts more egg-related allied suppliers compared to the IPPE. The concurrent industry association meetings and educational programs are focused on egg production given the concentration of farming operations in six Midwest states.  Although space limits the display of large displays including 700-case per hour graders and a range of aviary equipment, technical personnel are available on booths to discuss operational parameters supplemented by videos, models, components and short cross-sections of installations.

 

Educational programs presented included the North Central Avian Disease Conference, the Organic Egg Farmers of America Symposium, the Devenish Nutrition Symposium, and a number of informal gatherings taking advantage of attendance at the event.

 

The Midwest Poultry Federation arranged a series of educational presentations for pullet and egg management, feed technology and business leadership.  During the trade exhibition, poultry TED Talks were presented detailing innovations in products and management for the benefit of attendees. Entertainment included PEAK Unhatched, an Exhibition-floor Happy Hour and Hospitality Night.

 

Despite the prevailing favorable margins in egg production, there were a number of overhangs that detracted from optimism: 

 

  • The resurgence of highly pathogenic avian influenza with three complexes affected since the beginning of April requiring depopulation of close to six million hens in two states was the major issue of concern.  It is evident that HPAI is no longer limited to seasonal epornitics but has expanded beyond the migration of waterfowl in spring and fall months.  This is in all probability due to transfer of the H5N1 virus to non-migratory species of free-living birds.  This is evidenced by dead grackles and pigeons yielding H5N1 virus in the vicinity of the index dairy farm in Texas that was affected with Bovine Influenza-H5N1.  Outbreaks of HPAI have been regularly diagnosed on a weekly basis in backyard flocks in diverse states outside the migratory seasons.  These small flocks serve as sentinels for the presence of avian influenza virus and many cases are not diagnosed. Sometime in 2024 the USDA-APHIS will have to accept regional vaccination for turkeys and egg-production flocks. It must be obvious by now that it is futile to attempt to eradicate an endemic infection spread by the aerosol route in addition to fomites.

 

  • The impasse in Congress is impeding passage of legislation necessary to maintain agricultural production.  The Farm Bill is mired in dissent in both the Senate and House Agricultural Committees with polarization separating left and right-leaning members.  Ultimately there will have to be compromise on the two issues of contention represented by allocations for SNAP and WIC favored by the left and diversion of funds from climate change programs to commodity price support on the right.  The 118th Congress has barely passed fifty bills as opposed to an anticipated 400 in a normal two-year period. Appropriations bills were delayed by months by resorting to stop-gap continuing resolutions. Both parties are to blame for their lack of commitment to the national interest caused by grandstanding and intra-party conflict.

  • There was considerable talk in the hallways at PEAK of consolidation in the retail food sector.  The proposed merger between the Kroger Company and Albertsons Corporation is a concerning issue since this would create more buying power for the chains that are readily able to adjust orders to influence the industry benchmark price discovery system to the disadvantage of producers.

 

  • There are concerns over the economy.  The Federal Reserve has obviously reduced inflation from 8.9 to 3.5 percent but is experiencing difficulty in reducing levels to the target of 2.0 percent.  International conflict and the price of energy are adding to the burden of inflation that is reducing consumer spending despite the last hurrah of extravagance during the first quarter of 2024.

 

  • As in all planting seasons, there is concern over the anticipated crop.  With the projected cyclic transition from a La Nina to an El Nino event, weather patterns during the 2024 growing season will influence yields.  Lower feed prices have contributed to positive margins over the past twelve months but an unfortunate combination of higher input costs with production exceeding demand may impact profitability in the late third and early fourth quarters.

 

It is hoped that the contributions derived from PEAK 2024 in the form of technical and trade information will be transferred from the event to all U.S. production units and companies with evident improvements in productivity and profitability.


 

Relative Cost of Groceries

04/04/2024

Dr. Leo Feler, Chief Economist at Numerator, recently published on prices of groceries and their affordability.  During January 2020, that marked the beginning of the COVID years, through December 2023, the cost of at-home food rose by an average of 25 percent.  Income, however, increased 24 percent over the same period, offsetting the average rise in shelf prices.

 

Dr. Feler documented an increase in price for food categories over the four-year period with poultry, fish and eggs increasing at 26 percent and the lowest category, dairy and related products, at 21 percent.  His predictions are for stability in price going forward with low, single-digit increases paralleling the situation before COVID that resulted in difficulties in the supply chain.    

Despite the economic reality that grocery items are as affordable now as they were in 2020, there is a perception that prices are higher. This is evidenced by recent comments from the White House relating to “price gouging” and “shrinkflation” and echoed in statements by the Federal Trade Commission.

 

Consumers have adapted to higher prices by searching for value, hence, the rise in popularity of house brands.  Surveys showed that forty percent of consumers are buying more private brands and reducing expenditure on unnecessary food items. They are also buying in bulk as reflected in the reported revenue of Costco, Sam’s Club and B.J.’s.  Consumers are also calculating cost per unit and splitting their grocery purchases among competing stores to take advantage of special offers.

 

According to Steve Markenson, Vice-President of Research at the Food Marketing Institute, consumers are now considering convenience and quality in addition to cost in evaluating items.  The deep discounters, led by Aldi, have obviously benefited through low operating costs, limited range of SKUs and demonstrably lower prices based on their private ownership and business model.

It is evident that retailers that can negotiate favorable prices from their suppliers contributes to higher gross margins and improvement in the bottom line. This only benefits consumers if there is a pass-through of savings. The check-out point and the print-out of the transaction either reinforces or dispels the perception of value.

 


Dr. Leo Feler, Chief Economist, Numerator Inc.

Given the increase in eat-at-home, and with increased concern over the price of groceries, promotion of eggs should emphasize value. This includes an emphasis on nutrient content against alternatives including dairy, red meat and plant-based alternatives.  Since the expanded concept of value incorporates convenience and ease of preparation, the American Egg Board should address the inherent attributes of eggs and develop a “not just for breakfast” message.  Food manufacturers should be encouraged to incorporate egg-derived products in foods and develop a range of snacks and meal presentations featuring eggs as a source of high-quality protein with limited caloric contribution to diets.


 

Scientific Realities Should Moderate Official Statements on Avian and Bovine Influenza

04/04/2024

To date, APHIS has been factual in their minimal reporting on the ascending incidence of bovine influenza-H5N1.  In contrast, a number of State Veterinarians have been far more optimistic in their official statements dampening concern over the potential of the virus to become zoonotic.

 

The major concern is the possible emergence of a zoonotic strain of H5N1 as noted by the World Health Organization that regards the virus as a potentially pandemic strain requiring surveillance over a range of avian and mammalian species.  At this time, there is no evidence that spontaneously altered strains of H5N1 are infectious to humans although affecting a wide range of terrestrial and marine species with evident animal-to-animal spread. Despite the recovery of H5N1 virus from a dairy-herd employee with conjunctivitis, the only previous U.S. case occurred in a worker involved in depopulation of an infected flock.  Given thousands of worker hours of exposure in 2015 and then again during the 2022-2023 epornitics, one asymptomatic case suggests that even with extreme exposure, humans are currently refractory to infection.

 

Although there have been over 800 documented cases of H5N1 or H7N9 influenza among humans in Asia over two decades, the attack rate is exceptionally low given the level of potential exposure since emergence of these strains in poultry.  Most of the cases involved either the elderly or the immunosuppressed. Patients in most instances presented with a history of contact with live poultry either on farms or in wet markets as with the two cases documented in South America in 2023.

 

Given the reality that migratory marine birds and waterfowl are susceptible to H5N1 and disseminate the virus across five continents, ultimately, mutations may occur that may result in a zoonotic strain.  The higher the concentration of susceptible birds or livestock in an area or on a farm, the greater will be the probability of either a mutation or a recombinant event. 

 

Accordingly, it would be advisable to consider human health as a justification to create non-susceptible commercial bird populations through immunization.  Currently, archaic and inappropriate trade restrictions in addition to the imposition of contrived trade barriers disfavor universal adoption of vaccination. The World Organization of Animal Health supports the principle of vaccination and clearly states that this modality should not be a restraint to trade providing there is adequate surveillance to detect infection in immunized flocks.  In the age of PCR, this is an achievable objective. It will be possible for regulatory authorities to introduce and manage a program of certification to confirm that export consignments are derived from flocks free of infection.

 

The concerns of the broiler segment of the U.S. poultry industry concerning vaccination are recognized.  When human health is considered, the potential of losing export sales pales in significance to even the slightest risk of an emerging pandemic. The cost of COVID with the attendant loss of more than one million of our fellow citizens suggests that H5N1 avian influenza is more than just a “chicken and turkey problem”.

 

It is now time to implement regional vaccination against HPAI in areas with a history of infection and specifically for turkey and egg-production flocks.  The associations representing the segments of the U.S. poultry industry, APHIS, USAPEEC and the Office of the U.S. Trade Representative need to coordinate and intensify their activities to accept rigorously controlled vaccination. As far as possible, issues relating to restraint in trade based on vaccination should be resolved given that HPAI is now panornitic in distribution.

 

A statement by a mid-west State Veterinarians that “research to date has shown that mammals appear to be dead-end hosts which means that they are unlikely to spread HPAI further” is simplistic and is devoid of substantiation by either current virology or epidemiology.  State Veterinarians are tasked with preserving the health of flocks and herds under their jurisdiction and should not be cheer-leaders for consumption of livestock products.  With respect to HPAI, there is more at risk than either loss of trade or the cost of depopulation.  Creating a solidly immune population of commercial poultry would contribute to a lower risk of facilitating a zoonotic strain of avian influenza.  The emergence of bovine influenza-H5N1 in March and outbreaks in mink and marine mammals should be a warning of the potential for an influenza pandemic reminiscent of the 1918-1919 catastrophe. Risks of mutation might be small but economic and humanitarian consequences are infinite.


 

FTC Report Implicates Large Grocery Chains in Food Inflation

03/25/2024

A March 21st report issued by the Federal Trade Commission (FTC) identified the involvement of major retail grocery chains in food inflation following supply chain disruptions coincident with the COVID years.  The report analyzed the actions of producers, wholesalers and retailers in “skyrocketing prices for groceries” that impacted consumers.

 

The report demonstrated that larger chains benefitted at the expense of smaller competitors.  The focus of the report included Walmart, Amazon, Kroger, C&S Wholesale Grocers, Proctor and Gamble, Tyson Foods, Kraft-Heinz and Associated Wholesale Grocers Inc. The FTC report demonstrated the power of major retailers and their impact on the supply chain based on buying power to the disadvantage of smaller, regional grocery chains.

 

The FTC report documented that large retailers increased their revenue by more than six percent in relation to costs during 2021 through 2023 without commensurate increases in operating expenses.  The report also documented pressure on suppliers relating to prices and delivery.

 

The report was welcomed by the National Grocers Association (NGA), representing independent and small stores. Chris Jones, the Chief Government Relations Officer for the NGA, noted the past failure of the FTC and DOJ to use existing legislation to suppress pricing decisions that disfavor consumers and small suppliers.  The NGA president, Greg Ferrara, stated, “Decades of lax antitrust enforcement enables grocery buyers to coercively squeeze suppliers to comply with their trade demands, unfairly disadvantaging smaller competitors”.

 

The Robinson-Patman Act specifically disallows both discriminatory and predatory pricing.  Buyers who benefit from these practices violate the Act if the buyer pressures producers to agree to lower prices for commodities of similar grade and quality.  This would apply specifically to generic USDA graded eggs that are a commodity in interstate commerce.

 

The FTC report coincides with a lawsuit intended to block the merger of the Kroger Company with Albertsons Corporation.  The Administration recognizes the political benefits of consumer protection in a pre-election year. Notwithstanding the intensified enthusiasm for anti-corporate action, it must be recognized that egg producers have been nickeled and dimed by the major chains over decades. This has reduced margins and deprived producers of sufficient profit to re-invest in maintenance and expansion. An added burden with less than adequate reimbursement is represented by the need to convert housing from conventional cages to alternative systems since 2020 to comply with welfare requirements.

 

The situation in the U.K. parallels the findings of the FTC with regard to pressure on producers. As with the U.S retail grocery in the U.K. is an oligopoly with a few retailers sourcing domestic-produced and some imported shell eggs. After Brexit feed and energy costs soared but retailers failed to adjust prices to allow independent producers of free-range eggs, comprising half of national supply, to reach break-even. The result was a sharp decline in availability as producers ceased operation due to exhausting working capital and credit. Eventually many of the large chains were obliged to make ex gratia payments to individual producers to restock housing and to resume production.

 

The wholesale price of packed generic eggs in the U.S. should be subject to the law of supply and demand. Cyclic periods of oversupply that were a feature of the 1980s through the 2010s have given way to a more rational rate of expansion following consolidation, conversion to non-caged housing and more reliable market intelligence. Unfortunately the prevailing industry benchmark reporting service now appears to function to the detriment of producers. The daily quotations appear to amplify downward movement in price and allows chain buyers the opportunity to depress prices over the short term by temporarily withholding orders. This results in a disproportionately low price, exacerbating price elasticity. A Midwest-large Chicago Mercantile Exchange (CME) quotation would be more equitable given that the costs of corn and soybean meal representing 65 percent of nest run expense is determined by the CME.

 

Examination of pricing policies of large grocery chains by the FTC is long overdue and was in all probability a byproduct of the investigation of the proposed Kroger merger (or acquisition) with Albertsons. This transaction would be detrimental to suppliers, workers and consumers as evidenced by lawsuits filed by the Attorneys General of eight states and the FTC.


 
































































































































































































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