The U.S. turkey industry was slammed by an outbreak of highly pathogenic avian influenza (HPAI) back in 2015. While the corresponding supply shock caused turkey prices to skyrocket, it ended up being a major headache for producers who incurred the added cost and hassle of prevention (heightened biosecurity) and clean-up in response to positive cases.
The aftermath of that HPAI event was even more burdensome on turkey producers as demand collapsed in response to the run-up in prices. Buyers were also obviously distressed by product shortages and cost increases.
Participants throughout the value chain were unified by a desire to never again see an outbreak of that magnitude. If “never” was perhaps asking too much and infeasible, market participants were at least hoping it might prove to be just a once-in-a-generation event, yet seven short years later, the “sequel” arrived.
Latest HPAI outbreak endures longer
One key aspect of the 2015 outbreak was that, despite an explosion of cases heading into spring, it ended abruptly in June of that year.
This latest version, after making its initial appearance February 2022 and once again accelerating and spreading uncontrollably through early spring, did not disappear with the approaching summer outside of a very brief hiatus. Positive HPAI cases were reported at a fairly aggressive clip from August through December 2022.
Case counts slowed noticeably in January 2023, but the unending trickle of new farms confirming HPAI cases kept the turkey industry on high alert of a possible flare-up as spring approached.
Instead, the outbreak finally – apparently, as of this writing, at least – ran its course. Two separate turkey farms in the Dakotas reported confirmed HPAI cases on April 19, resulting in the loss of nearly 135 thousand birds. There have been no new cases on a commercial turkey operation since then.
Overall, the most recent HPAI outbreak resulted in the depopulation of more than 10 million turkeys, including breeders, over a roughly 15-month stretch.
Markets left reeling as supplies rebound
With HPAI cleared from its path and no obvious restraints in place, the turkey industry has been able to increase production and availability very aggressively in relatively short order.
Ready-to-cook production of young turkeys was nearly 18% larger than a year earlier in May and on track to post a 10% increase from last year overall during the Apr-Jun time frame.
Markets have been on the defensive with supplies climbing at such a rapid rate. Spot prices for fresh tom breast meat peaked at nearly $6.75 per pound late last year but have already fallen well below the $3 mark and continue to sink. Frozen 8-to-16 pound hen prices peaked at nearly $1.80 per pound (USDA) last fall but have already fallen into the $1.50 area and even a little below that already this summer, reflecting rare counterseasonal weakness in this segment.
It’s increasingly a given that these key turkey products will be considerably cheaper for the 2023 holiday season compared to last year. Turkey industry stakeholders are left hoping that this latest HPAI outbreak doesn’t precipitate another extended slump in demand as the previous one did.
