2294 part 1 final report.pdf - Agra CEAS Consulting

Prevention and control of animal diseases worldwide
Part I: Economic analysis: prevention versus outbreak costs
of 3% in the event of a global consumption shock due to AI (assuming a 10% shift in global consumption
away from poultry) (A283).
In the case of HPAI outbreaks, the available evidence also indicates that demand for chicks has fallen
substantially suggesting longer-term dramatic effects on the sector’s productive capacity and restructuring
(as discussed above). As the experience of these outbreaks is relatively recent, it is not clear whether and
how long the sector would take to recover to pre-outbreak production volumes.
There is also an effect on employment, which appears to be determined by the degree of
commercialisation and industrialisation in the sector. For example, following the Asian HPAI crisis,
countries whose poultry sectors are less industrialised like Lao PDR and Cambodia had a small loss of
jobs, compared to Indonesia which has a considerable share of commercial systems 1 and 2.
Table 9 Ripple effects: selected examples of the impact on upstream/downstream industries
Country
Impact
Feed sector
global
Vietnam
(a)
Indonesia
Nigeria (a)
Benin
EU-25
Since 2003, the global decrease in the demand for poultry products following HPAI appears to
have affected the demand and prices for feed grains and oilseeds on world markets, although these
markets are now thought to be recovering (source: Feedinfo 2006). (A295)
The AI outbreaks have had a sharp effect on feed manufacturers, particularly those selling to semicommercial
producers. For instance, one major manufacturer reported a drop of 90% in feed
production while another reported a drop of 60-70%. The cost of commercial feed accounts for up
to 70% of the cost of raising industrial chicken, and Vietnam’s poultry sector normally consumes
an estimated 8-10 mt/year of complete feed, nearly all of which is directed toward semicommercial
and industrial farms. (A9)
In Indonesia, where half the provinces were infected with AI and 16.2 million birds died/were
culled (excluding backyard farming), the demand for poultry feed was estimated to be reduced by
45%. (A91, A76)
Following the HPAI outbreaks in Nigeria in early 2006, poultry feed sales dropped by 82%, and
only 43% recovery (to pre-outbreak levels) had been attained by May 2006. Even in non-affected
farms, following a 45% drop in the flock size (as farmers were cutting down flocks due to lack if
funds to feed the birds), the level of feed usage declined by 55%. The loss to feed mills is
estimated at about N 60.5 million ($0.5 million), on the basis of average feed consumption per bird
(0.135 kg per day) and assuming it takes about seven months for the feed mills to fully recover
from the shock at a constant rate; this translates to a 3.5 month volume of feeds (the average price
per ton of feed is about N 48,000). (A293)
Maize prices are reported to have gone down because the demand from large-scale Nigerian
poultry producers for maize feeds has been drastically reduced, following the HPAI outbreaks in
neighbouring Nigeria. (A291)
The European poultry feed industry, which has a turnover of about US$ 42 billion, has been hit by
the AI crisis, with a 40% reduction in demand for poultry feed in some EU countries (A292).
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