With COVID-19 continuing to dominate the headlines and board agendas, it can be easy to lose focus of the wider risk landscape. However, if you are involved in poultry production or any of the associated industries, the spread of Avian Influenza (AI) viruses, and their potential impact on the global $310.7 billion poultry industry1 and shake-up of the wider global protein markets2 is a growing global concern.
The disease is ‘Notifiable’ and the veterinary services within countries are responsible for its control3. There are two main strains:
Highly pathogenic avian influenza (HPAI) viruses can kill up to 90-100% of the flock
HPAI viruses can kill up to 90-100% of the flock and disease control normally consists of culling and imposing strict quarantine procedures;5 there are no vaccines or treatments available. These disruptions cascade beyond the farm boundary into the supply chain, with consequences ranging from those manufacturing feedstock elements for flocks, to the transport companies moving the world’s stock. However, countries not yet hit by the virus can learn valuable lessons from those already experiencing this virus and build resilience and limit the impacts.
Building resilience to risks associated with AI requires a holistic approach, and scenarios, technology, hiring staff from the veterinary sector, and multi-stakeholder engagements are some of the tools available, all guided by scientific best practice. This is a threat no farmer can afford to ignore, and one they cannot act on alone. If AI hasn’t visited your region, there has never been a better time to understand the disease dynamics, build awareness in your supply chain, and learn from those who are experiencing it first-hand.
Poultry is the world’s primary source of animal protein6. As production is an important source of human dietary protein in many countries, a threat to this source can weaken food security and limit production within the effected countries. With consumption increasing so is the risk. Since the early 1960s, global per capita consumption of eggs has almost doubled, while poultry meat consumption has increased fivefold. The highest growth has occurred in Asia and Latin America. Between 2000 and 2030, per capita demand for poultry meat is projected to increase by 271% in South Asia, 116% in Eastern Europe and Central Asia, 97% in the Middle East and North Africa and 91% in East Asia and the Pacific.
Since the early 1960s, global per capita consumption of eggs has almost doubled, while poultry meat consumption has increased fivefold
By modeling environmental events and physical assets, risks to property and people can be quantified and managed. The goal isn’t predictions, it’s preparedness. As we have seen with COVID-19, despite best efforts to contain infectious diseases, global supply chains always carry a risk of transmission; response requires sustained biosecurity practices, reporting, and cooperation efforts. These will be essential as virus strains continue to emerge and spread. The Americas have managed to contain incidents so far. But as the largest global hub for poultry, for how long?
Avian influenza (AI) viruses, commonly known as bird flu, infect a wide range of hosts, including humans and swine. The natural reservoir lies in populations of wild aquatic birds such as ducks and shorebirds whose global migratory patterns are a key factor in being able to limit the global spread. Wild birds normally carry AI viruses in their respiratory or intestinal tracts, but they do not usually get sick, which allows them to carry the viruses long distances.
New AI virus strains are created frequently which means there is a constant risk one of the new strains may spread easily among people7. This risk is not unfounded. The viruses responsible for all four of the worldwide human influenza pandemics seen in the last 100 years have originated from birds, and most recently the virus hit the headlines in June 2021 with China reporting the first human case of the H10N3 strain8.
The incubation period in poultry can be a few hours to a few days in individual birds, and up to 2 weeks in the flock
There is no effective treatment for avian influenza. However, good husbandry, proper nutrition, and broad-spectrum antibiotics may reduce losses from secondary infections9. The incubation period in poultry can be a few hours to a few days in individual birds, and up to 2 weeks in the flock. A 21-day incubation period10, which takes into account the transmission dynamics of the virus, is used for an avian population in the context of disease control.
In birds, AI viruses are shed in the faeces and respiratory secretions. Because of the resistant nature of AI viruses, including their ability to survive for long periods when temperatures are low, they can also be carried on farm equipment and spread easily from farm to farm. This range of transmission points highlights the need for coordination across multiple stakeholder groups, from haulers to hunters who may cross farm boundaries.
Source: International Journal of Veterinary Science & Technology11
Primary risks for companies include:
Increasing demand for protein, close conditions in commercial production, developments in international trade routes and increasingly interconnected markets mean the risk is global and is an issue all producers should consider. Current avian influenza virus strains have been circulating and diversifying in wild bird populations for at least the last 100 years13. Shifts in climate patterns and the global nature of overlapping migration routes of wild birds means the risk is global and containment difficult. Past outbreaks highlight the potential economic impacts14:
In June 2021, China’s agriculture ministry confirmed an outbreak of H5N8 avian influenza in wild birds in the North-western province of Shaanxi. The Ministry of Agriculture and Rural Affairs says 4,249 wild birds were killed in the outbreak, and six cases of highly pathogenic avian flu reported across China this year have been isolated incidents and there has been no regional outbreak, the ministry added15.
Continual tracking and sharing information is essential as the scale of response needed is more than any one company or country can shoulder the burden of and requires stakeholders throughout the value chain working together. This is why many countries are exploring scenario-based exercises in partnership with industry. The World Organization for Animal Health maintains a list of these simulations, with many allowing international observers to share knowledge and build capacity as countries look to stress test their risk management strategies19.
Since August 2020, there has been a substantial increase in the number of AI outbreaks caused by various subtypes, notably the H5N8
Since August 2020, there has been a substantial increase in the number of AI outbreaks caused by various subtypes, notably the H5N8, reported by many countries in Europe, Asia and recently in Africa, which reflect a period of heightened risks20. Looking at the outbreaks over the last 18 months against the global distribution of poultry, a fresh outbreak in the Americas is a scenario waiting to happen.
The World Organization for Animal Health provides the most comprehensive global tracking, with options to view Avian Influenza events across the world by selecting the disease from the map layers. To view the current state of global Avian Influenza events, select high and low pathogenic Avian Influenza, and 2020 and 2021 in the year options. This will load results into an interactive map.
Interactive map: Global outbreaks in the last 18 months
Source: World Animal Health Information Database outbreak map: 1 January 2020 – 30 June 202121
The 2014-15 outbreak serves as a stark reminder of the risks and remains the largest and most significant animal health emergency ever recorded in the US. The outbreak began in captive wild birds and backyard flocks in the north-western region and spread to commercial operations in 21 states. Research from College of Agricultural Sciences at Pennsylvania State University states the commercial turkey industry in Minnesota and egg-laying chicken companies in Iowa were most affected; 7.4 million turkeys and 43 million layers died from the disease or were depopulated to contain the disease22. Direct cost estimates related to disease response activities of poultry depopulation, disposal, virus elimination, testing, and indemnity payments were close to $1 billion. A further $3.3 billion has been estimated in indirect costs.
With the U.S. poultry industry supporting more than 2.1 million jobs, $121.1 billion in wages, $576.6 billion in economic activity and $41.9 billion in government revenue,23 it is understandable the United States Department of Agriculture (USDA) is concerned about the potential impacts AI could have on poultry producers, local communities and the wider stakeholders24.
Efforts are also ongoing to understand the risk and inform surveillance strategies and policy action, including research, simulation exercises, and scenarios to explore uncertainty.
The need to quickly contain an outbreak is a lesson Iowa learned in 2015 when Avian Influenza forced the destruction of nearly 32 million birds at an estimated cost of $1.2 billion to the State's economy25. Beyond biosecurity protocols, rapid detected and response is essential. To aid this a new research project led by Texas A&M Veterinary Medical Diagnostic Laboratory (TVMDL) is looking to develop rapid next-generation sequencing procedures to assist in the detection and characterization of AI viruses26.
Rapid and accurate detection of new viral introductions are instrumental to containment measures and outbreak control
While there are several well-established diagnostic tests and procedures for AI detection, these tests are target-based and so may not detect emerging, undiscovered pathogens. Given the ability for AI viruses to mutate as outlined earlier, rapid and accurate detection of new viral introductions are instrumental to containment measures and outbreak control.
After rapid response to an outbreak in 2017 in Tennessee that was contained to two premises, concern was raised around the need to quantify the magnitude of a large HPAI event. Researchers at the University of Tennessee have been using impact analysis for planning (IMPLAN) to estimate the economic impacts of what could have happened to better understand, assess, and cope with the risks faced27.
With 89.2 million birds produced annually in the region understanding the what-ifs is essential when looking to understand potential impacts to industry outputs and jobs. To do this the researchers outlined two scenarios that cover different supply chain pathways: 1) Broiler supply chain analysis excluding processing from the control area; and 2) Broiler supply chain analysis including processing from the control area.
Both scenarios model depopulation rates of 10, 15, and 25% of broiler breeders and broilers in a nine-county area of poultry production in south-central Tennessee where the industry is concentrated (Bedford, Franklin, Giles, Lawrence, Lincoln, Marshall, Maury, Moore, and Wayne). The results indicate that while producers’ impacts to the economy occur, the largest impact is a reduction in processing industry – roughly a x10 factor increase between scenarios. These types of estimates communicate the value of disease prevention and savings for producers, processors, consumers, and wider stakeholders.
| Total industry outputa | Jobsb | |||
|---|---|---|---|---|
| Direct | Total | Direct | Total | |
| 10% depopulation | $2,028,691 | $2,588,037 | 23.3 | 19 |
| 15% depopulation | $3,043,036 | $3,882,056 | 34.8 | 28.4 |
| 25% depopulation | $5,071,728 | $6,470,094 | 58.1 | 47.4 |
| Total industry outputa | Jobsb | |||
|---|---|---|---|---|
| Direct | Total | Direct | Total | |
| 10% depopulation | $20,000,380 | $25,198,260 | 36.2 | 72.6 |
| 15% depopulation | $30,000,569 | $37,797,390 | 54.4 | 109 |
| 25% depopulation | $50,000,948 | $62,995,649 | 90.5 | 181.5 |
a. Annual dollar value of goods and services an industry produces or a measure of economic activity.
b. Estimated number of total wage and salary employees (both full- and part-time), as well as self-employed.
Data source: Department of Agricultural and Resource Economics, University of Tennessee27
Storylines in particular have been advocated as a better way to provide actionable information, because storylines seek to improve risk awareness, as scenarios better correspond to how people perceive and respond to risk. This is something the University of Ohio explored in 2019 in a series of table-top scenario ‘Connecting the Dots’ – the material is available online for anyone to use and adapt to their own business environment.
If an outbreak occurs, financial risks could go beyond the tangible values of losing your flocks. Impacts could include being unable to fulfil contracts, losing suppliers as they source alternatives and experiencing increased costs of sourcing resources such as disinfectant and vet time are all potential risks. These could be compounded further by intangible risks around reputation and brand loss. Thinking through how you would respond will help strengthen resilience, no matter what the source of disruption. This is something Willis Towers Watson have been helping clients with through our global network of Willis Research Network partners.
Robust risk management practices should include a thorough understanding of the risk landscape, to ensure appropriate identification and analysis of risk. This will enable decisions to be made around the control, reporting and monitoring of those risks. Companies can then use this information to demonstrate to underwriters that biosecurity measures and protocols are in place. Being able to show action is being taken – lowering the risk – can then be factored into underwriting decisions.
As with all diseases, AI does not recognize borders, therefore rates can change quite quickly
While the London market provides cover for OIE diseases, such as Avian Influenza, there is a vast range of rates depending on where the recent recordings of outbreaks occur. As with all diseases, AI does not recognize borders, therefore rates can change quite quickly. At the time of writing, cover is not provided in South Africa and Poland is currently contending with 262 outbreaks28, the country’s highest recorded number of infections and as a result 6 million birds have been culled. The previous high was 65 outbreaks. Continued coverage from insurers is aided in some cases by governments taking a stance on disease protocol and offering some sort of compensation to farmers when there is a government enforced slaughter, however this is not always the case. We have also seen several producers hire veterinarians into biosecurity roles to harness expertise, and we can provide insight into industry best practice. These kinds of partnerships are essential to building trust along the chain and ensuring Willis Towers Watson clients have the cover and advisory they need, whether this is business interruption insurance or input into innovative solutions.
Technology is seen as a key resource to identify and isolate an outbreak within your business
Technology is seen as a key resource to identify and isolate an outbreak within your business. For example, combining telemedicine for rapid response, alongside on-farm and in-shed sensors could monitor poultry welfare, and harness machine learning to identify patterns at an early stage would prevent stalling of supply chains. This would be beneficial to producers and regulators and could tap into the growing consumer interest around welfare, sustainability and provenance.
As we’ve seen across Asia and Europe, the effects of Avian influenza (AI) on the larger economy, livelihoods, food security, human health security, and the environment are substantial, and given the progression of the virus it feels like a case of not if but when it will take hold in the Americas.
Interconnected problems require integrated solutions, and this is where scenario-based thinking and expert partnerships can be used to explore the impacts from those already experiencing the virus and leverage those resilience lessons to explore complex risks and decide what to do next. This will be essential to provide comfort to carriers the risks are understood, and action is being taken before capacity is questioned.
The important lesson from COVID-19 is not all pandemics will look like this one, which highlights the importance of building understanding about the risk landscape and ensuring any investments made in combatting AI will have holistic benefits against future animal diseases and consumer trends. If you are looking at new technology investments or hiring choices, considering AI within those could uncover new challenges before you face them.
1 https://www.prnewswire.com/news-releases/global-poultry-market-report-2021-301232418.html
2 https://finance.yahoo.com/news/worldwide-poultry-feed-industry-2026-111300937.html
3 https://www.gov.uk/guidance/avian-influenza-bird-flu
4 https://www.cfsph.iastate.edu/Factsheets/pdfs/highly_pathogenic_avian_influenza.pdf
5 https://www.oie.int/app/uploads/2021/03/hpai.pdf
6 http://www.fao.org/poultry-production-products/products-processing/en/
7 https://www.pirbright.ac.uk/viruses/avian-influenza-virus
8 https://www.wsj.com/articles/what-is-going-on-with-bird-flu-china-reports-first-human-case-of-h10n3-strain-11622658667
9 https://www.cfsph.iastate.edu/Factsheets/pdfs/highly_pathogenic_avian_influenza.pdf
10 https://www.nationalchickencouncil.org/bird-flu-its-not-in-your-food/questions-and-answers-on-avian-influenza/
11 https://www.scireslit.com/Veterinary/IJVST-ID31.pdf
12 https://www.oie.int/en/disease/avian-influenza/
13 https://royalsocietypublishing.org/doi/pdf/10.1098/rstb.2018.0257
14 https://ec.europa.eu/health/ph_threats/com/docs/factsheet_influenza_en.pdf
15 https://www.reuters.com/world/china/china-reports-h5n8-avian-flu-wild-birds-shaanxi-province-2021-06-09/#:~:text=The%20outbreak%20at%20the%20Hongjiannao,
no%20regional%20outbreak%2C%20it%20added
16 https://ec.europa.eu/food/animals/animal-diseases/diseases-and-control-measures/avian-influenza_en
17 https://www.thepoultrysite.com/articles/weekly-poultry-digest-europe-issues-a-report-on-bird-flu
18 https://www.cdc.gov/flu/avianflu/h5/index.htm
19 https://www.oie.int/en/animal-health-in-the-world/the-world-animal-health-information-system/simulation-exercises/2019/
20 https://www.oie.int/en/disease/avian-influenza/
21 https://wahis.oie.int/#/dashboards/country-or-disease-dashboard
22 https://extension.psu.edu/avian-influenza
23 https://www.poultryproducer.com/united-states/u-s-poultry-industry-provides-2-1-million-jobs-economic-impact-up-15-percent-in-two-years/
24 https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/animal-disease-information/swine-disease-information/african-swine-fever/seminar
25 https://eu.desmoinesregister.com/story/money/agriculture/2019/09/27/iowa-pigs-african-swine-fever-outbreak/2438868001/
26 https://tvmdl.tamu.edu/2021/01/12/tvmdl-leading-grant-funded-project-to-develop-rapid-response-methods-for-influenza-a-viruses-in-birds/
27 https://rrs.scholasticahq.com/article/14168.pdf
28 https://www.thepoultrysite.com/news/2021/05/poland-records-largest-ever-bird-flu-outbreak#:~:text=Poland%20is%20currently%20contending%20with,the%20spread%20of%20
the%20disease
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