How bird flu may impact consumers' poultry purchasing plans

How bird flu may impact consumers' poultry purchasing plans

Food and ag economist Jayson Lusk examines bird flu's impact on poultry shopping in May Oklahoma State Food Demand Survey

More consumers may be stocking freezers with poultry and other meats ahead of perceived increase in their cost due bird flu losses, food and ag economist with Oklahoma State University Jayson Lusk writes in his blog.

Related: USDA, CDC officials answer avian flu questions

The finding is based on the May OSU Food Demand Survey, which Lusk prepares.

Lusk notes that the survey indicated an uptick in awareness of news about bird flu and an increase in concern about the issue, much as it did a month prior.

A few questions regarding bird flu were added to the May survey, Lusk said, to find consumers' expected actions in response to the avian flu outbreak.

Food and ag economist Jayson Lusk examines bird flu's impact on poultry shopping in May Oklahoma State Food Demand Survey (Photo by Justin Sullivan/Getty Images)

Respondents were asked two agree/disagree questions: "I plan to eat less turkey and eggs in the future because of the outbreak of avian influenza (bird flu)" and "I am concerned about the safety of the turkey and eggs I eat because of the outbreak of avian influenza (bird flu)."

About 23% of respondents agreed or strongly agreed with the question that asked if they planned to eat less turkey or eggs. About 32% say they are concerned about the safety of turkey and eggs.

"That's far from a majority, but it might be a large enough to affect demand," Lusk writes. "Whether these beliefs will ultimately manifest themselves in the supermarket remains to be seen."

How bird flu may impact consumers' poultry purchasing plans

Lusk previously wrote that the impacts of bird flu on food prices is largely dependent on both the ultimate extent of turkey and laying hen losses, as well as the consumer demand for products like turkey and eggs.

Lusk notes that the consumer demand for eggs when compared to turkey is likely to be more inelastic because eggs have few substitutes. Therefore, a smaller price increase in turkey is expected.

Related: Avian flu timeline: A recap of HPAI headlines

Other outside factors, however, should be included in a hypothetical discussion of price increases. Lusk notes turkey and egg exports have slowed, meaning a greater supply on the U.S. market. Meanwhile, consumers may substitute beef and pork for turkey, limiting demand.

Grain market outlook >>

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On grain markets, Farm Futures Market Analyst Bryce Knorr noted last month that bird flu's impact is largely psychological, and there's little concern about changes to feed demand.

"Even under the most aggressive scenarios it's hard to come up a situation where more than 25 to 50 million bushels of corn demand would be lost," Knorr said, citing USDA's unchanged feed demand estimate in the May 12 crop report.

"Remember, broiler production will reach more than 40 billion pounds in 2015 – that's billion with a "b" – and the government actually raised its forecast this week of total poultry production, despite a drop in turkeys," Knorr said.

According to the CDC, the current risk to humans in regards to bird flu is low. USDA says that sophisticated surveillance ensures that the food supply is safe, and avian influenza is not transmissible by eating properly prepared poultry, so it is safe to eat.

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