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2294 part 1 final report.pdf - Agra CEAS Consulting

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Prevention and control of animal diseases worldwide<br />

Part I: Economic analysis: prevention versus outbreak costs<br />

Country<br />

US<br />

Impact<br />

In the US, where 62% of oilseed and cereal production is destined for animal feed, an epizootic<br />

that would reduce livestock production by 10% would immediately result in the loss of 418,000<br />

jobs, a surplus of 18.4 million tonnes of cereal and oilseed crops, a 10% drop in global market<br />

prices, and crises in other producer countries. (A292)<br />

Other inputs: demand for chicks<br />

Indonesia<br />

Brazil<br />

The drastic fall in demand and prices which was caused by the HPAI outbreaks in early 2004 had<br />

consequences for the producers of hatching eggs and day-old chicken. The demand for day-old<br />

chicks in the infected areas decreased by 58% for broilers and 40% for layers. Overall, the weekly<br />

supply of day-old chicks fell by 17.5% for broilers and 25% for layers. According to data from the<br />

Indonesian Poultry information Centre, within 1-2 months from the outbreak, sales of broilers fell<br />

from around 21 million per week to 14 million, while prices fell from Rupia 2200 per day-old<br />

chick to as low as Rupia 200. (A16, A76, A91)<br />

In Brazil, where 30% of poultry production is for export, the price of a day-old chick – an early<br />

indicator of a possible change in production – is <strong>report</strong>ed to have fallen by 50% following global<br />

<strong>report</strong>s on HPAI. Even through the country is not infected, market uncertainties and price drops<br />

have prompted larger producers to cut their production by 15% this year (2006), thus affecting the<br />

country’s export outlook (A292).<br />

Wholesale markets/traders<br />

Vietnam<br />

(a)<br />

Nigeria (a)<br />

The reorganisation of HCMC’s chicken and egg production following the HPAI outbreaks (and<br />

the need to ensure product safety) led to a decline in the number of wholesale egg markets from<br />

134 to 75, while the number of poultry markets fell from 1,550 to 7 (excluding supermarkets). (A9)<br />

Associated businesses such as those trading in poultry products are estimated to have lost close to<br />

N 61.7 million ($0.5 million): this is estimated as the 10% of the farm gate price of the number of<br />

birds that were either culled or dead as a result of the HPAI. One live chicken sellers’ association<br />

(Abubakar Rimi Market in Kano, reputed to be the largest local chicken market in Nigeria),<br />

claimed that their sales dropped from 10,000 birds to only 1,000 birds per day in February/March<br />

2006. The price also crashed from N350 to N150 per bird during the crisis. Similar experiences<br />

were <strong>report</strong>ed in other markets. (A293)<br />

Catering sector<br />

Nigeria (a) A sharp drop by 81% was <strong>report</strong>ed in sales in restaurants, fast food business outlets, roadside<br />

roasted chicken sellers and egg sellers within 2 weeks following the announcement of HPAI<br />

outbreaks (February 2006), which by May 2006 had only recovered to 67.7% of the pre-outbreak<br />

sales. (A293)<br />

(a)<br />

More extensive information on the costs in these countries can be found in the case studies<br />

Source: compiled by <strong>Agra</strong> <strong>CEAS</strong> <strong>Consulting</strong><br />

Civic <strong>Consulting</strong> • <strong>Agra</strong> <strong>CEAS</strong> <strong>Consulting</strong> 84

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