Capstone believes the avian influenza’s aggressive spread in US commercial facilities has increased the risk that more foreign nations will ban the importation of US poultry and poultry products.
This virus has spread much quicker than in the 2015 outbreak, which saw $3.3 billion in damage to the industry at the time. The spread of bird flu across the US has rapidly increased during the past two weeks, with nearly 14 million birds euthanized since March 9th.
A ban on imports by countries such as China, Mexico, and Mexico would put pressure on the price of poultry domestically, while the loss of production would lead to inflation in egg and turkey prices. This will adversely impact major producers such as Tyson Foods Inc. (TSN), Pilgrim’s Pride Corp. (PPC), Perdue Farms, Sanderson Farms Inc. (SAFM), and Cal-Maine Foods Inc. (CALM).
Comparative Poultry Bird Depopulation Tracker (as of March 23rd)