November 11, 2005

 

Bird flu could lower EU's feed grain demand

 

 

A general outbreak of bird flu in the EU this winter could see grain consumption by the poultry feed sector contract by a maximum of four to five million tonnes, according to Strategie Grains, a monthly analytical report issued Thursday.

 

This would result in a 45-percent, or a two-million-tonne rise in the wheat surplus to 6.3 million tonnes and a 55-percent, or a two-million-tonne rise in the corn surplus, to 5.5 million tonnes. The barley surplus would rise 30 percent or 300,000 tonnes to 1.3 million tonnes, the report said.

 

The data is drawn from a base estimate for total grain consumption in the poultry sector of 20 million tonnes of wheat, 13.6 million tonnes of corn and 3.3 million tonnes of barley, Strategie Grains noted.

 

Stressing that the H5N1 strain of bird flu so far has not been detected within the borders of the EU, Strategie Grains said several cases have been confirmed in nearby countries such as European Russia, Turkey, Croatia and Romania.

 

Two of the four principal Eurasian bird migratory routes pass through the EU-these are the Black Sea-Mediterranean and East Atlantic flyways.

 

The report said opinion is divided on how much the H5N1 virus has spread along migratory routes, but scientific consensus has emerged on three points.

 

Firstly, Strategie Grains acknowledged that the virus could spread from Eastern Europe to Western Europe and to the Atlantic seaboard during the autumnal migration, although this is not necessarily the most probable method of contamination.

 

Secondly, geographical analysis of the virus' spread from East Asia to the western part of Russia has revealed a "startling correlation" with the route of the Trans-Siberian railway, Strategie Grains said.

 

And finally, the risk of contamination from migratory wildfowl returning from Africa in the spring of 2006 could be increased if the virus is able to get a foothold in Africa in the meantime.

 

"Preventative and containment measures in Africa could be much less efficient than in Europe, either in terms of the discovery of infected birds, or of the speed with which the relevant authorities can implement the required sanitary measures," Strategie Grains noted.

 

Should the virus spread quickly, but only upon the return of migratory wildfowl in April next year, cereal consumption by the poultry feed sector could contract by 2.2 million tonnes.

 

This would result in a 0.8 million tonnes rise in the wheat surplus to 5.1 million tonnes and a 1.2 million tonnes rise in the corn surplus, to 4.7 million tonnes. Under this scenario, the barley surplus could rise 100,000 tonnes to 1.1 million tonnes, the report said.

 

Based on the precedent of the 2003 Dutch avian flu outbreak that was caused by the H7N7 strain, the flu-related reduction in poultry feed output is estimated by Strategie Grains to be 200,000 tonnes or about 6-7 percent for 2002-03 and also 6-7 percent for 2003-04.

 

"In the previous Dutch outbreak, infected birds were first discovered in February 2003: therefore only just over a third of the crop year was affected," Strategie Grains said. "We can therefore assume that if the virus had appeared at the beginning of the year, the maximum reduction in poultry feed production would have been around 15 percent," the report added.

 

Although there is no guarantee that the current bird flu strain would have the same impact as in the Netherlands, this is the closest parallel that exists.

 

Strategie Grains said it is therefore working on the basis that an outbreak in any given country would lead to a 15-percent drop in annual poultry feed consumption.