US Bird Flu Outbreak May Hurt Dairy and Beef Demand

A virus that has killed millions of birds is spreading among US dairy cows, raising concerns that the outbreak may hurt the supply of dairy and beef. More than a million birds have succumbed to the virus, and the contagion seems to be spreading among dairy cows across the US, creating apprehension in consumers effecting both supply and demand dynamics. StoneX Group Inc. analyst Dave Kurzawski said recently in Bloomberg, "Risks to consumer demand for dairy are prevalent in conversations." He stated that while there are "big risks on the table," the impact on consumer behavior remains unclear. The US Department of Agriculture has said there's little risk. Yet, the situation has unsettled the markets, with cattle and milk prices dropping. There's concern that some shoppers may balk at elevated beef or dairy products.

The USDA said Monday it confirmed bird flu in cows in New Mexico, Texas, and several other states. The virus has infected a single person in Texas. The largest egg producer in the US closed one plant after discovering the virus in its facility.

Infected cattle experience decreased lactation with low appetite and are susceptible to pneumonia along with an inflammatory disease clinical mastitis, the Texas Animal Health Commission said. However, it's important to note that most animals recover within two weeks with supported care, however with lower milk production levels.

While no cases have been found in beef herds, cattle futures fell 2.7% on Monday. The market rebounded on Tuesday. Milk futures fell for four consecutive days on the Chicago Mercantile Exchange, even as the USDA said the outbreak poses no significant threats to milk and other dairy products due to sterilization before reaching market shelves.

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