On this special episode of Let’s Chat Dairy, Alyssa Badger welcomes HighGround Dairy’s Cara Murphy to answer your biggest questions about the Highly Pathogenic Avian Influenza (HPAI) outbreak in dairy cattle, including the potential impacts on dairy markets. Stay up-to-date by checking out our Navigating HPAI – Dairy Market Resource Center here.
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Alyssa: Hello everyone and welcome back to Let’s Chat Dairy. Today is Wednesday, April 3, and we have a special episode today because we really feel like it important to talk a little more in depth about what is going on with the highly pathogenic avian influenza or HPAI situation and how it can or cannot impact dairy. We have released a number of breaking news stories and we did start a resource center on our website as well, but since we have an amazing analyst on the team with an animal science background it seemed fitting to hop on here and clear some things up. So, I’m sitting here with Cara Murphy and we are going to answer some of your pressing questions. In case you were not aware, Cara actually grew up raising beef cattle and she received her bachelor of science degree in animal science from Iowa State University. Go Cyclones! So without further a dew, let’s get into it Cara. The markets seem confused. From March 15, when we first released a breaking news story about sick cattle in Texas, May Class III is down around 5%. May cash-settled cheese is down around 3.6%, April dry whey lost about 7%, nonfat is down, Class IV is losing around 1% even though butter is defying the weak trend we are seeing elsewhere, but fundamentally speaking, without this avian flu situation this is a seasonal move. Milk availability is rising throughout spring, and obviously so is commodity availability, and we have been in a bad place from demand perspective, especially from Class III, so I think this situation is not helping. But whether dairy markets are truly responding is up for debate.
Cara: Yeah, I would think that the two biggest concerns are the response from the consumer and potential trade implications from restrictions but we have not heard anything to confirm either of these.
Alyssa: Yeah, Cara, so is the dairy and meat supply safe?
Cara: Yes, the dairy and meat supply chain is safe. The US is one of the safest food supply chains in the world. Can you contract this disease through consuming pasteurized dairy products? No. Pasteurization is required for interstate commerce of dairy and is used to eliminate harmful pathogens such as this. The USDA does note consuming unpasteurized, or raw milk or dairy products, is a different story, but we will settle it here. Don’t drink unpasteurized milk or eat unpasteurized dairy products. Its not worth the risk. When looking at the meat supply the USDA is very confident that the meat supply is safe. Animals who are culled are inspected prior-to and post slaughter. In general though, cook your meat. Roasts and steaks to 145 degrees Fahrenheit, ground beef to 160, per the USDA food safety recommendations.
Alyssa: So, how is this different than what consumers have already faced and what they already know about avian influenza in poultry?
Cara: Yeah, so most of what the consumers know about avian influenza comes from the impact from the poultry industry which started in February 2022. By the end of that year about 43 million birds were lost to the disease or through depopulation which is a way to mitigate the spread of infection. This sent egg prices through the roof. If you remember that time we had really high prices for eggs. The difference here is that highly pathogenic avian influenza in poultry has a 90-100 percent mortality rate, which often occurs within 48 hours, which is why depopulation is necessary to stop that infection. Unlike poultry, however, dairy cows do recover. There is essentially no mortality rate the USDA has recorded at this time. So with that, dairy cow depopulation is unnecessary. Cows will get better and it will be a better situation than it was for poultry. We do have some news out of Texas yesterday that a layer flock down there did contract high pathogenic avian influenza. This is a bit of a concern however the poultry industry has dealt with this for a while now and I trust them to handle everything accordingly to how they work.
Alyssa: Awesome, so do we know the cause and how its spreading? How is this disease spreading?
Cara: The big spread, the big host here, is wild birds. Down in Texas they found deceased pigeons and grackles on these areas where they detected avian influenza. One of the big concerns right now though is of those wild birds, migratory waterfowl, so geese and ducks, are hosts, and it is spring and they are migrating back north. The USDA is definitely watching that to see what is happening. The other thing we have seen is there was a confirmation of this disease in a farm in Michigan. It is is suspected, or cannot be ruled out, bovine-to-bovine transmission.
Alyssa: Interesting. So, you mentioned earlier there is reports that farmers are culling animals, why is that then? And do we know if its a lot of animals? What do we know?
Cara: Right now, it doesn’t appear to be a lot of animals. Sick cows do recover from this disease, however, often their milk production does not rebound to pre-infection levels and that is why they are being culled. So, you have cows who are underproducing. They are not paying off their feed costs. They are not paying those bills. Those cows are being culled. Farmers are rather prudent with this culling right now. Replacement heifer inventories are rather tight, and expensive. If she can pay her bills at a bare minimum they’ll most likely keep her and will go through lactation, get her pregnant again, go through another lactation, so we will have that. We may see a result of this culling in the USDA weekly slaughter data but the sheer number of cattle culled right now might not accumulate to a substantial amount. If you are looking for that data in the USDA, that does come out on Thursday and you’ll want to look for federally inspected Region VI, which is the Texas, New Mexico area. That is where we will see that pop if there is going to be one.
Alyssa: Alright Cara, I think I have just one more question for you. What the odds on this consumer reaction? What can we expect?
Cara: I think this really takes us back to 2009 when the swine flu, H1N1, blew up. A lot of consumers were concerned about contracting this disease through consumption of pork. We talked earlier about pasteurization is making our dairy products safe. We talked about a safe meat supply so I think here you might have a little consumer concern around this if they take to it, but its not long lasting. Consumers usually see this, they’re told about how our food supply is safe and what we do to take care of it and they go back to their usual purchasing. I don’t think we will see a huge consumer reaction here.
Alyssa: Before we move on and close out. I do want to ask you about the animal to human transmission that was also in the news this week. Can you fill us in on that?
Cara: April 1 the CDC confirmed a person in Texas tested positive for this disease. Now this is not the first case of high pathogenic avian influenza in humans nor in humans in the US. A person in Colorado tested positive for the illness in 2022. The CDC does note that this disease is uncommon in humans although it has occurred sporadically worldwide. The general concern around this is that the disease has shown signs to be zoonotic, meaning that it can be transmitted between species from animals to humans. This, however, is not new information. It is concerning. It is interesting. I will leave it to the medical health professions to tackle that, but it is not new. This isn’t a new crazy thing. It has been seen in other parts of the world, so they are taking from that to understand transmission, and understand how this is going. More than likely, that would be from some type of contact with a sick animal. If you do not have contact with a sick animal you should not contract this disease.
Alyssa: Perfect. Alright. We thank you for sharing your expertise with us. As always, Cara. I think I’ll close out on one last thought, so there seems to be a lot of ideas that this situation leans rather bearish, but I think that it also can’t be ignored that HPAI situation is really another check box that is an impeding factor for growing the US dairy herd. As we know, the herd size is already pretty low. Replacement heifer inventories are light. When demand does come back, is the US in the position to meet that demand given the supply growth that is quite limited? Not just here in the US, but elsewhere as well. So, something to think about. As always we will keep you apprised to the developments around this situation. Please check out our resource center at HighGroundDairy.com That includes all pertinent information we have gathered about the situation from trusted sources. Thank you so much for tuning into this special episode of Let’s Chat Dairy, and we do look forward to coming on later this week to fill you in on more dairy market insights. Cheers! Thanks Cara!
