Ep. 8 Impacts of the Current Highly-Pathogenic Avian Influenza Outbreak

[00:01] Introduction: Welcome to Relevant Risk from the Fryar Price Risk Management Center of Excellence, presenting conversations and analysis about risk and risk management for food and agriculture, supply chain decision makers from farmers to consumers and everyone in between. This is a relevant risk Hello.

[00:19] John Anderson: Hello this is John Anderson, director of the Fryar Price Risk Management Center of Excellence at the University of Arkansas. Herewith is another Relevant Risk podcast. Several guests with me today, we have Andy McKenzie, associate director of the center. Andy, how are you today?

[00:34] Andy McKenzie: Doing good, John.

[00:35] John Anderson: And James Mitchell, livestock economist in the Department of Agricultural Economics. James, how are you?

[00:40] James Mitchell: Good. I feel like a recurring guest now.

[00:42] John Anderson: You’re a regular. Absolutely. And joining us by Zoom, we have Jada Thompson, who is an assistant professor at the University of Tennessee, soon to be joining the faculty here at the University of Arkansas. So, Jada, we look forward to having you in the room with us before too long. But for now, welcome to the podcast.

[01:02] Jada Thompson: Yeah, I’m excited to be here.

[01:04] John Anderson: So Jada is with us today because she has considerable expertise with the poultry industry and- with a particular aspect of the poultry industry that’s relevant to us right now. And that’s with disease outbreaks. And Jada, we’re kind of in the middle right now. I don’t know if we’re at the beginning or the middle or the end, but we are dealing now with an outbreak of highly pathogenic avian influenza, High Path AI in the poultry sector. And this is a big topic for that industry and really for the meat sector as a whole. What can you tell us about where we are with this outbreak?

[01:44] Jada Thompson: Yeah, you know, I’ve been on some other calls, and the question is always, when is this going to end? And I’d say if I could forecast that perfectly, I’d be doing something different. You know, I’d be a millionaire. But in terms of kind of where we have historically in comparison to the 2015 outbreak, we’re getting close to the peak. You know, we expect this would probably end close to June, be really contained within two quarters, you know, there’s a lot of differences between this and the previous outbreak, which is kind of changing a little bit of the way we think about this outbreak, especially compared to 2015, the previous one. But yeah, I think that you know, it’s a large outbreak. You know, it’s changing markets, it’s changing how we- the replenishment rates and the prices, but yeah, I think somewhere close to that, we’re in the good middle part of this. And hopefully, fingers crossed it’s, you know, the downhill slope after this.

[02:35] John Anderson: So, you mentioned maybe at the peak of the outbreak, hopefully at the peak of the outbreak, there is a seasonality to these sort of things. I was checking out today a USDA APHIS, the Animal Plant Health Inspection Service maintains a really nice website, basically summarizing some of the metrics related to the AI outbreak. And we’ll post a link to that to that website with this podcast. But as I look at their website, this outbreak started in early February it looks like, again, you said we expect it to play out sometime in the next couple of months. What- in terms of seasonality, what are the factors- why do you say you think we’re maybe at the peak or past the peak and this thing will play out? When do we expect this thing to kind of break in terms of seasonal tendency?

[03:33] Jada Thompson: Yeah. So a lot of the movement in this outbreak is going to be through wild bird migratory patterns. And so wild birds move through kind of big flyways in the US, so the big flyways, the Pacific, the Central or the yeah, the Central, the Western and then the Mississippi and the Eastern Flyway. And one of the things is, is the kind of seasonality is related to the weather and the weather patterns and these kinds of migratory bird patterns. So if we think as, as a temperatures raise, you get a little bit of the reduction in viral pressure and then also the kind of movement of the birds away and so the, especially for a very large broiler producing region, like Arkansas, this is good news, because we’re seeing these wild birds kind of moving north, away, kind of taking away that that viral load pressure.

[04:18] John Anderson: So, as I’m looking at the APHIS site again, and you mentioned 2015, and 2015 was a major outbreak. And I did want to touch on maybe some some some similarities and differences with the 2015 outbreak. And I’m going to kind of be working from memory here. So I may have a lot of this wrong and you can straighten me out if that’s true. But as I remember the 2015 outbreak in terms of the time of year, it was pretty similar to what we’re seeing now, very much centered in the Midwest, very much affecting layer operations and turkey operations, and my recollection of that outbreak, there really wasn’t much impact on broilers. How much of that had to do with geographic location and how much of that had to do with the shorter life cycle of broilers? And is- how is that playing out in this outbreak?

[05:07] Jada Thompson: Yeah. So I’m going to break down your question in kind of two components, and one is just the comparison of the pathway of the disease over time. And then two is kind of why broilers may or may not have been affected now versus then. In the 2015 outbreak, what we did was we started on that kind of Pacific Coast. The introduction was in this backyard flock and we moved up through the- and into a commercial flock and kind of that was December and then early in January was the first commercial flock in 2015. And then we moved up into Canada and so there’s a lot of Canadian numbers that we don’t have. It’s not publicly available. So there was a lot of HPI, we just didn’t hear about it. And then it moved over into that Mississippi Flyway and it started coming down that central region and so it was very localized spread in terms of where that came down. One of the other things, and so then- I’m going to bring up this one point in a second for this outbreak, what we saw was it started in the Eastern Pacific Flyway or the Eastern Flyway and moved and moved westward. And this is still through those flyway patterns, so wild bird migrations. But we’re seeing a lot more of that lateral movement across the U.S. And using that term, we’re going to use it in a different way in a second, one of the differences is in the spreads of these two different outbreaks, so in 2015, we came down that Mississippi Flyway, it was predominately in kind of Minnesota, the Iowa area where there’s a lot of concentration of turkeys and layers. And then what we had was a lot of lateral spread and that means from house to house, from the chicken house to chicken house. And so this outbreak, we haven’t seen a lot of lateral spread. It hasn’t really been this large amalgamation of houses that have been affected from house to house, but more so this kind of external wild bird patterns spread, which is- it has its pros and cons, right- like it has its- it means biosecurity is doing its job. It means people aren’t moving birds- that farmers are taking advantage of the good biosecurity practices and we’re able to kind of contain those diseases. That also means that you kind of can’t control the wild birds. And so the difference between those two are going to be part of the reason why we saw the differences in broilers and the affecting your broiler. So one is there is this kind of low life span. So we’re not getting a lot of access for these birds to captured and before they’re maybe going to harvest and also where it’s going, you know, so kind of the concentration of this outbreak, you know, so in this outbreak, we’re seeing some broilers that have happened, especially in the Delmarva region, Kentucky, and sometimes these other states because again, it’s just a wild bird that that movement across the U.S. And then also just again, that concentration. So the kind of good side of this is that we’re not having massive amounts of premises that are being infected, but it’s also a lot wider spread. And so we’re hearing a lot more about it. And so you start looking at this number of states that are impacted during this outbreak and it’s substantially larger.

[07:55] John Anderson: Right. I think the APHIS site right now says 29 states are affected- that’s a little more than half the country.

[08:04] Jada Thompson: Yeah. But of those infections, you know, one of the other things we need to think about, especially because we think about people who are looking at investing and looking at, you know, how are eggs being used. How are broilers and all of these other things being used, one of the other things to think about is there’s also a lot better reporting now. We have a lot more people who are aware of it. There’s a lot more communication from industry to growers to report this kind of for indemnification, and some other issues.

[08:28] John Anderson: Yeah. Well, and speaking of reporting, I mean, if you check out the APHIS actually lists by date, detections, where they are, state, county, and what production system has been affected. And if you look through this list, lots and lots and lots and lots of very small backyard operations are picked up in the reporting and screening process. And I know there was a lot of that in the 2015 outbreak, but I’ve been struck by just the granularity of coverage that we seem to be getting in terms of monitoring for this is pretty impressive it looks like.

[09:06] Jada Thompson: Absolutely. And I think that that comes from both the messaging coming out of APHIS prior to this, right. There was a lot of communication about defending our flock across the US and for those backyard flocks. I think access to social media where there’s a lot more communication between these kinds of backyard farmers and producers. And then also just again, that reporting that we’re getting from those, cause previously I think in 2015, had my mom’s chickens died, she might have just said oh something happened and would have moved on, where now she might say, oh I’ve heard this on Facebook, I should call somebody about it. And so I think we’re picking up a little bit more of that as well.

[09:40] John Anderson: That’s a that’s a great point. So I want to shift gears a little bit now. Let’s- and bring our other guests into the conversation and start talking about impacts, and I guess before we get to market impacts, maybe let’s take a little bit more of a micro-level approach, because not everybody listening to this may be familiar with AI. High path AI a is a hugely disruptive episode when it happens on a particular farm. And Jada, I know you’ve done some work with APHIS over the years- could you say a little bit about- what does an APHIS outbreak mean for an individual farm?

[10:16] Jada Thompson: Yeah, so avian influenza, there are lots of different kinds of them. Specifically, High Paths are ones that are going to have high mortality and high morbidity. So you know, farmers going to walk out to their farm and the chickens are going to have a little bit of upper respiratory issues and then within the day they’re going to be dead. You know, I think that there were some pictures from the 2015 outbreak when I was working with the APHIS folks. And, you know, it was one morning a guy went out to look at his turkeys. His turkey seemed kind of lethargic. By that afternoon they were all dead. I mean, they were talking, you know, and it is not always as fast, right? Like there’s some presentations and some other issues. And so, you know, looking at the cat- and getting this disease, this is a case of, you know, you have high sickness and then high mortality rates. And so from a farmer standpoint, right, there’s a lot of death and then be detected. So let’s say I have two, you know two houses on my farm and one of my houses are infected. The likelihood is that my other house is going to be impacted because I’ve been walking between, I’m breathing, and there are other birds. And so this is also going to lead to a lot of depopulations. And so there’s a lot of other kinds of- I wrote a paper on some mental health effects of this as well, which we don’t think about a lot. But there are these implications of these farmers are going out and losing their entire livelihoods, or looking like they’re losing, you know, for a little bit, their income streams. And so, you know, just from the disease impacts, you know, we’re looking at it, you’re going out, you’re birds are going to get sick. It’s going to be a respiratory disease where they’re panting, you know, they’re having mucus and we’re having a lot of these upper respiratory issues and then death [inaudible].

[11:44] John Anderson: So a catastrophic event at the farm level when you have an outbreak like this. And because of that, it’s that the intervention is very aggressive, that’s why we’re doing the monitoring and screening, and things like this tend to also potentially at least to manifest in larger market effects. Andy, I think you wanted to ask about some of the larger market impacts maybe.

[12:08] Andy McKenzie: Yeah, sure, John. So when I’m thinking about an event like this, I wonder how does the price shock manifest itself? So is it like in just one direction, so you’ve obviously got a supply-side shock, right, where birds are taken out of the supply chain. And so that in my mind would lead to higher prices. But is there anything on the consumer demand side for poultry products that would actually make prices go down, or how does that work, Jada?

[12:41] Jada Thompson: Yeah, so absolutely. You’re correct. Right. So we’re going to see this increase in the price because we have a, you know, a supply-demand issue. Some of those things that you’re going to see that might actually work kind of the opposite direction would be consumed, and I’m going to talk on that in a second, or like these trade effects, right? So then we just have this like access to external markets in terms of consumer response that we haven’t actually seen a lot of consumer response. HPAI or highly pathogenic avian influenza, is zoonotic, which means it spreads between animals and humans. So birds and humans. But we don’t see a lot of that spread. It hasn’t recombined. So it’s like really- [inaudible]-pathogenic or viral. So it’s not moving between humans very easily, which means- we as the average consumer are not really worried about getting HPAI. They’re not worried about avian influenza and capturing that. There was a paper on Italian consumers, I did some work and I cited this paper from Italian consumers, and really found no kind of market impact. They’re not really changing their behavior in terms of buying. And so- that could change and we could continue to see that. And that would definitely be some interesting work in the future to see how consumers respond to that, because of BSE, right? We know BSE consumers see that, via Creutzfeldt-Jakob disease in humans. And then there’s a huge human consumer response too to that product. And with avian influenza, we’re not particularly seeing that. Now I think as we have more access to information, as maybe potential misinformation getting out there about the spread and how it’s moving, that could change in the future. But right now we don’t see a lot of that. And it’s more driven by the kind of counter effects to the supply shocks is what you asked about, are really more driven by the kind of the trade impacts related to HPAI.

[14:26] John Anderson: Before we get to that, I think that’s a that’s an interesting question, an interesting point about consumer response. You know, James, across the livestock sector, historically, we’ve seen huge demand-side shocks from past zoonotic episodes. And I’m thinking of BSE in 2003, which Jada mentioned. The other one that comes to my mind is 2009, I believe it was. We had a swine flu outbreak and there seemed to be a big consumer response to that, to the point that the swine industry did some really aggressive marketing to sort of counterprogram on that. It doesn’t seem like there’s much consumer reaction at all going on not only to this but maybe to the last couple of times we’ve we’ve had episodes like this. Do you hear any discussion in the beef industry or concern across the sector more generally about consumer reactions?

[15:29] James Mitchell: No, I mean, not really. And I think for a lot of the reasons that Jada explained about how it’s a zoonotic disease, but we don’t have that really prevalent crossover between birds and humans. I mean, you used the BSE example and, you know, the beef industry, it took 20 years to gain back all that lost market access to-

John Anderson: Right.

James Mitchell: -to trading partners like again, Jada summarized with high path and trade. So I think the consumer reaction isn’t necessarily the domestic U.S. consumer, that consumer reaction is the trade effects that happen because of something like this occurring and losing access to those markets, that can be viewed as a government response to protect their domestic industry and also to protect their domestic consumers in many cases.

[16:16] John Anderson: And it seems to me like, and I’ll open this up to anybody, James and Jada in particular maybe, when you think about trade affects, it does seem like the market, maybe government policy has gotten more sophisticated related to these sort of zoonotic episodes that in the past it used to be, okay, there’s a swine flu outbreak, there’s an AI outbreak, there’s a there’s a foot and mouth outbreak. Trade from the entire country is shut off.

James Mitchell: Yeah.

John Anderson: And there’s a lot more regionalization now that takes place. Talk a little bit about the development of that.

[16:54] James Mitchell: Yeah, so I mean, you just mentioned a key development there. And again, I’ll let Jada clean up what I have to say. She’s also a far more expert trade economist than I am. But the industry has done a really, really good job of making this a more regionalized impact, as opposed to how you described a national industry impact, in that a lot of our trading partners have instituted trade restrictions at the regional level. So, for example, China. They won’t import products from states impacted by high path, but they’re not just throwing out a fly restriction on U.S. poultry imports. And so they are doing case by case, state by state basis. And in many ways, I think that has been a huge benefit to the industry this time around than maybe previous outbreaks of high path or similar diseases and other industries is, again, to your point, it’s become more sophisticated, that it can be treated on a state by state, region by region basis, as opposed to a blanket restriction for any poultry leaving the U.S.

[17:59] Jada Thompson: Yeah. I’ll tack on to this. I mean, always. These are the bread and butter front conversations. you know, one of the things that you see about this compartmentalization is the OIE standards coming up about that. And so talking about these these these trade standards, you know, we had this agreement on sanitary and phytosanitary movements. And so we had a little bit more of some scientific background to say, hey, you know, we can justify having a disease-free area within the middle of a disease event. And so, you know, I wrote a paper that basically counted the number of large, you know, national-level bans, state-level bans, and regional-level bans. Those kinds of county-level bans during the previous outbreak. And we showed that you know, those countries who were able to, willing to take the risk of saying, hey, we’ll make the smallest geographical compartmentalization, really continue to have that business continuity. And they benefited, from the depressed prices related to everybody making these national-level bans. And so back to Andy’s comment on how did that impact prices. Yeah. So when these big bans come in, you see the kind of depressed price because we’re a large player on the international market. And we see a movement of trade flow patterns going to different regions. One of the upsides of these that’s regionalization, this pattern, is it’s an international thing. So you started with the kind of regionalization has been around as an idea for a while. And it was really started like, 2015 was a really great example of when it was actually applied and when we started seeing it and then you have the foot and mouth disease down in Argentina and you saw this really big disease free compartmentalization allowed a lot more business continuity. And I think that as you see that happening more and more, and we’re getting these kind of simultaneous disease outbreaks, I think there’s more pressure to continue this movement of flows, right? We have a lot more reliance of our markets for these food products, which is great. Right. And I think as an exporter in Arkansas, where you’re not impacted and you don’t have a lot of disease outbreaks, you know, I don’t want to be substantially impacted by what’s happening in Iowa. And so I think that there’s a lot of that regionalization that’s happening across the board and all over the world. One of the, I’m, just a shout out to some of that work that’s being done by the U.S. State Department and the U.S. Food Services and APHIS and these regulatory agencies that are working together, because a lot of those decision makings are happening by these kind of national vets that are coming together and say, yeah, we see your scientific, you know, your science. We see what you’re doing in your protocols, and we’re going to accept those protocols, and we’re going to believe that you’re going to impose those, you know, impose these rules about compartmentalization, about control areas, and buffer zones, and so all of these other things. And I think that that’s a really great working relationship between us and our trading partners, like James said, you know, like where China is making these much smaller you know, regional impact versus kind of previously.

[20:49] John Anderson: Yeah, I think it is kind of remarkable. And it is a testament to the way those international practices have changed that this outbreak, which we mentioned 29 states have had cases. I think the average consumer probably is not really even aware this is going on. I mean, in terms of of of impacts, again, devastating impacts on individual farms. But in terms of market impacts, they have been surprisingly modest, as widespread as this outbreak is. And I think that is a fundamentally that reflects these changes that have happened in the last decade or so related to trade.

[21:27] James Mitchell: Yeah, I would kind of go back to one of Andy’s points about the market shocks and price impacts and into the extent that consumers are noticing the impacts of this. I think it is on the price side and a way to kind of contextualize that. You know, I think data I looked at last week showed, you know, dozen of eggs prices were up 140% year over year. 2015 table egg prices were about 115% above year over year. So we’ve come down a little since the Easter holiday, peak demand, for example. But I think consumers, if they are noticing it is on the price side. But again, another kind of caveat to that that is important to point out is we’ve got a lot of other things going on right now that are making protein prices higher-

John Anderson: Right.

James Mitchell: Right, during the 2015 outbreak we were averaging $3 and $4 corn. This year we’re averaging $7 and $8 corn, so feed is a big part of that, too. So we were coming into this outbreak with higher poultry and egg prices. And so I think this is just kind of exacerbated that that price, you know, issue that consumers are probably realizing at the grocery store.

[22:38] John Anderson: Good point. And I would throw fuel into the mix there, too. Very high transportation costs on everything which on some of these products is a major part of the bill. But that’s an excellent observation. Andy, I believe you had another question, another issue you wanted to raise on this.

[22:54] Andy McKenzie: Yeah, there’s a couple of things I was thinking on. And one is, you already talked Jada about the impact on the individual farm level, but how are these risks and costs shared across industry as a whole? So, for example, if I’m a grower for some integrator firm, do I bear the risk as the grower on this sort of outbreak or is that the integrators problem?

[23:22] Jada Thompson: These are these are great questions without knowing, you know, specific farmers and specific- and it’s also a little bit on the type of industry we’re talking about. And so poultry is domesticated, you know, chickens. And so there’s kind of let’s call it break it down into kind of three, three different industries with different subsets and so we have broilers, we have turkeys and we have layers, and then we have breeders for each one of those. And so they all kind of have different type of contracting systems and other things. And so so in terms of like an industry, if I’m a grower, in general, I typically don’t own my own birds. And so the integrator kind of has to bear the cost of those. But those birds represent income for me. Right? And so I’m guaranteed some kind of income whenever I signed on to take on your birds. And so there’s a little bit of- they’re both bearing the burden of them. So the integrators sharing the cost of losing that, the kind of foregone income of these birds that are being lost or foregone eggs in general. And then also these growers are having to have the cost of their lost income. Now they’re getting paid oftentimes like- kind of like an extreme event, a catastrophic event. It’s not insurance, but some kind of money that the integrator has setting aside to pay them. There’s also indemnification that’s happening from the USDA level, where there’s a little bit of who gets paid that indemnification because the growers don’t own the birds, the growers are growing the birds. And so that’s lost revenue so there’s a little bit of where does that money go? Does it go to the integrator and then needs to go back out to the grower? And so some of those details are a little bit behind closed doors and we don’t get all of those. But I’ll tell you that, that one of the things that- that not even just about the loss of income right now, my birds are gone today, but also about how long does that loss have last? Because not only am I losing my brush a day and losing kind of foregone income today and kind of until I get restocked, but I can’t be restocked until my house is appropriately cleaned and disinfected and there’s a there’s a control time for that. And so I think you’re looking about 21 days before you even- anybody is even going to come back and test it. And then it depends on how you how you depopulated or you manage your catastrophic depopulations. And so sometimes if you are composting those- some of those compost places where you can’t bury, you can’t incinerate, you can’t move these birds off farm, you compost it in your house. Well, if you’re composting in your house, you can’t- you also can’t restock your house. And so when we talk about the long term, how long are these out- these implications happening for these growers, it’s I’m losing my money and I might lose it for another month or two. And then that’s and then and then we’re hoping that immediately as soon as I’m able to take on birds, that you have the populations to start sending them back to my house. And so from the risk on that, there’s a lot of of the kind of forgone income that these produce- growers have taking on this risk that isn’t really captured by the integrator. The integrator is going to compensate you for the loss of your birds today, but not necessarily for you being out of flock for another month and a half. Now, there might be some other programs that they might be coming on board with. There have been discussions about kind of catastrophic insurance, right? Catastrophic livestock insurance. There’s a little bit of how do we pay for that and some cost shares. There were some work with the office of the Chief Economist in looking at developing some- what is the best ways- should that look more like the crop insurance program, where there’s a cost share? Should that look like you’re getting paid market value? And how does that look? And I don’t think any of those answers have been ironed out yet. But, but your question was, you know, who bears the burden of that? And the integrators are going to take the hit on the number of birds today. But they’re always having people coming on board. And, you know, they’re not kind of having to worry about their houses being out for months and trying to figure out what do you do? While I can’t I can’t even come back online, and so I think that the growers are kind of having to bear that burden and those risks associated with- so not even just today, but in the future as well.

[27:21] John Anderson: This is, and this is kind of a long-standing issue, isn’t it, Jada, in the contract grower world; at least in the poultry sector of contract growers, how do you deal with income losses due to risks that are well beyond your control and are catastrophic? Like, like this? And, you know, there is no- there has been no mechanism to offer really risk mitigation instruments to contract growers. Isn’t that right?

[27:55] Jada Thompson: Yeah, absolutely. And that’s one of the things that, like you said, has continue to be a question and a question of how do we address this so that we can protect these growers who are, you know, who are the foundation of these big industries and who’s having to bear the burden because we’re saying, hey, you’re going to just take on this large cost and they’re already on the margin on their profitability. What do you do to deal with that? And so, yeah, and it’s for these and other events, I think COVID 19 brought a lot of attention to these growers, because one of the issues is a lot of these a lot of these growers are considered contracts, well and if you’re contract you know you don’t- you’re not an independent- you’re not self-employed and so you know you can’t have some of these safeguard mechanisms and there’s been some work in trying to change that, right, and trying to determine how do we define what is a contract grower and how does that relationship relate to their access to some of these safeguards, which I think has been one of those things that you’ve looked at John, right?

[28:47] John Anderson: Yeah, we’ve you know, going back a long way, actually, back to I think it was an outbreak actually that preceded the 2015 outbreak. We had some conversations about the potential for something like a business interruption insurance for contract growers because the concern, as you mentioned, it wasn’t so much, “I’ve lost this flock” because there’s an indemnification mechanism and yeah, it goes through the integrator but the integrators, APHIS has some leverage with the integrators to make sure they pass some of that compensation back to the growers, so if you lose a flock, there’s an indemnification mechanism, but what about the next flock and a half that you lose because you’re composting and disinfecting in house? What about, and to me this was absolutely the kind of the worst of the worst, and James, this applies, I think, more broadly than just poultry. To me, the worst situation to find yourself in was to be close to a disease outbreak so that you ended up in a quarantine zone, but without a direct loss of your own. So you have the inability to move product off your farm. And maybe that’s not just poultry, maybe that’s your cattle, maybe that’s your hogs, maybe that’s- that’s any traffic off your farm, but you haven’t directly had a loss, so there’s no indemnification mechanism. And so that was really where we were coming from with well, that’s- can we think of that? Can we conceptualize that as a business interruption issue and find access to the kind of sort of general business interruption insurance market that’s out there for other industries. And we really honestly didn’t have any success with that. But I think in drawing some attention to that problem, I think there was some value in that, even though nothing really came of it.

[30:30] James Mitchell: I- so I would argue something probably did come of that, John, and this is the Relevant Risk podcast, and so it’s about risk management and Jada’s, I’m sure very familiar with this- these efforts. But what’s kind of come out of that to the whole issue of maintaining business continuity and kind of trying to minimize the effects of those business disruptions are these enhanced biosecurity plans like this secure pork supply or the secure beef supply biosecurity plans and the development behind those procedures is the idea that it’s a way for farms to be able to continue business if there is a disruption and you do find yourself in a quarantine zone where, for example, if you can verify X, Y and Z are being done on your farm, maybe you can still be allowed to take some steers to an auction if you are in a quarantine zone or truck some hogs to a processing plant if you’re in a quarantine zone. So, there’s been a lot of development around finding risk management practices that will help minimize those types of business disruptions-

John Anderson: Yeah. Very true.

James Mitchell: -if- now not necessarily if you are the farm who is composting on your operation, but if you do find yourself in a- an area impacted by an outbreak and you are in a quarantine zone doing the right things to ensure that you can still operate during that time.

[31:52] John Anderson: Yeah. That’s a good- that’s a really good point. And again, to me, that’s very similar to the conversation we had earlier about the increased sophistication of these trade interventions. I think you’re right. There’s been an increased sophistication in how we deal with these quarantine situations, these mitigation strategies to make them effective in terms, of interdicting the disease without wrecking the market for everybody.

[32:20] James Mitchell: Absolutely.

[32:21] John Anderson: Okay, Andy, any more questions from you?

[32:25] Andy McKenzie: Actually, I think Jade has really answered all my questions.

[32:28] James Mitchell: Feels like Jada’s probably been on trial the whole time she’s been on this-

[32:31] John Anderson: That’s what we brought her on here for, right?

[32:32] James Mitchell: We’re just firing away at her and asking her to answer everything.

[32:35] John Anderson: She’s our expert witness in this trial.

James Mitchell: Yes, she is.

John Anderson: James, any last thoughts from you?

[32:40] James Mitchell: No, not at all. I think, you know, the big market impacts, I think were outlined very well by Jada and others on, you know, these regional market impacts with trade, how we’ve done a much better job of managing those types of things. And, you know, I’m going to put all my weight behind Jada’s forecast. So we’ll be done with this in June.

All: [laughing]

[32:59] John Anderson: Me, too. Already called my broker right now.

James Mitchell: Exactly.

[33:04] Jada Thompson: This is not to no investment decision should be made from this-

[33:06] John Anderson: There you go. But that disclaimer out there. Jada, as our guest-

[33:10] Jada Thompson: Making sure nobody’s going to be coming hitting me up and saying like, wait a minute, I sold out my stuff. You know? No, I mean, it’s, same, you know, there’s a hopeful idea that you know, that this is done tomorrow. I think that there’s a lot that has been done to try to help mitigate the spread of this. You know, I- June seems like a good time. That was about- when the last case, it happened in 2015. We’re following similar weather patterns in terms of like [inaudible] the kind of migratory patterns that we’re seeing, you know, all points are pointing to that. So, you know, take it with whatever grain of salt you’re going to take anything else I told you.

[33:43] James Mitchell: A point to kind of your forecast there. If I remember correctly, this outbreak started earlier in the year than the 2015 outbreak. So, could you follow the logic that maybe it’d be- end earlier than the 2015 outbreak? Or does that not really track-

[33:59] Jada Thompson: No- you know I had somebody ask me that the other day. Well- you know I was on a call with some, with some other groups of folks and, and they said similar- so the 2015 outbreak really started in December of 2014, and the first time we saw a kind of large-scale commercial effects were kind of not until March of 2015, but again we didn’t- you’re not accounting for all of those Canadian birds that were impacted from January until March. And the difference is, and the reason why we’re seeing it so much earlier this year was because it started in the middle of like kind of the Delmarva region where there were a lot of birds and a lot of birds that were- could be affected. And so it started in February and moved kind of westward instead of kind of coming up and over. And I think, so, I would like to say, I mean that would be great to say, we’re going to end this early and this is, you know, two weeks and we’re going to wash our hands and be done. But I don’t think we’re going to I’m not that hopeful. I think realistically we’re going to see it kind of continue. But I think we’re already starting to see that pressure kind of moving northward, which may be hopeful that, you know, just as one kind of final passing thing is just that HPAI kind of recombinates- at the end of the day, if you kill off all of your hosts, right, like you die out. And so, you know, we want this to downgrade to a low path. We want this to downgrade. One, it doesn’t impact trade, it doesn’t lead to the large scale mass depopulations. We can control it a lot easier. It’s a lot more manageable. And so, you know, I think that we’re going to see the pressure of these wild birds moving, and I think release a little bit of that that pressure here. And then hopefully also that we see this kind of shift away from this, you know, this H5N1 version that we have now, this Eurasian version and maybe into a more low path, which becomes much, much more manageable and much more something that’s not going to impact our our, you know the supply as much as this one does.

[35:41] John Anderson: Yeah, that’s a that’s a great point. Jada, thank you for joining us today. It’s great to talk to you and have you on the podcast. We very much look forward to your relocation to Arkansas and joining us in the department. But we appreciate the opportunity to have a little bit of a preview of that today. And we, I’m sure that, like James, you’ll end up being a regular with us before too long. So good luck with the move and let us know when you’re ready to start unpacking boxes.

[36:09] Jada Thompson: Will do. And thanks again for inviting me.

 [36:12] John Anderson: All right. This has been the Relevant Risk podcast. Thank you for joining us.

Conclusion: Thanks for listening to the Relevant Risk podcast. A production of the Fryar Price Risk Management Center of Excellence in the Department of Agricultural Economics and Agribusiness within the University of Arkansas system. The Fryar Price Risk Management Center of Excellence carries out teaching activities through the Dale Bumpers College of Agricultural Food and Life Sciences at the University of Arkansas in Fayetteville, and research and extension activities through the University of Arkansas System Division of Agriculture. Visit https://fryar-risk-center.uada.edu/. For more information. Thanks for listening!