Could avian flu on cattle farms impact dairy prices?

(NEW YORK) — The law of supply and demand has shown for centuries that when the amount of a good in high demand dwindles, prices change relative to the availability.

When it comes to the U.S. food supply chain, environmental health impacts on livestock have prompted such price elasticity, most recently with a wave of highly pathogenic avian influenza (HPAI), commonly known as bird flu and the result is has had on wholesale egg prices.

“Prices are impacted when there is more demand and less supply for the product. In the instance of egg prices, the avian flu which has been detected in birds since 2022 has impacted around 80 million birds across the country,” retail analyst Hitha Herzog told ABC News. “That type of exposure could severely hamper production which drives the prices up.”

Bird flu hits dairy cattle farms

As cases of bird flu have continued to sweep farms and producers across the U.S., officials have now launched investigations into an illness involving dairy cows.

The U.S. Department of Agriculture Animal and Plant Health Inspection Service announced Tuesday that dairy cattle in Texas and Kansas have tested positive for HPAI, with symptoms including decreased lactation and low appetite.

“Additional testing was initiated on Friday, March 22, and over the weekend because farms have also reported finding deceased wild birds on their properties,” the agency stated. “Based on findings from Texas, the detections appear to have been introduced by wild birds. Initial testing by the National Veterinary Services Laboratories has not found changes to the virus that would make it more transmissible to humans, which would indicate that the current risk to the public remains low.”

Both federal and state agencies are “moving quickly to conduct additional testing” for the specific bird flu strains associated with the sick cows.

The USDA assured consumers that “there is no concern about the safety of the commercial milk supply or that this circumstance poses a risk to consumer health.”

“Dairies are required to send only milk from healthy animals into processing for human consumption; milk from impacted animals is being diverted or destroyed so that it does not enter the food supply,” the agency continued.

Plus, pasteurization is a requirement for milk sold in stores, which the agency reminded “has continually proven to inactivate bacteria and viruses, like influenza, in milk.”

Could dairy prices, supply be impacted by bird flu?

At this time in “the rapidly evolving situation,” the USDA said that milk loss from sick cows “is too limited to have a major impact on supply,” with the hope and caveat that there “should be no impact on the price of milk or other dairy products.”

With the latest waves of bird flu wiping out entire flocks of egg-laying chickens, eventually causing shortages and some increased prices, this new impact on dairy cows begs the question, could impact milk and dairy prices eventually be an issue at the consumer leve, if at all?

“The main way this could impact the consumer is through the output of milk being produced. The pasteurization process is so rigorous it would kill the virus if it was present in milk from infected cows, however only 10% of the exposed herds have been infected,” Herzog said. “While there will be some milk loss, the panhandle area accounts for around 625,000 cows and about 1.3B gallons of milk produced annually. The affected milk will be small compared to the bigger picture of production.”

The chief research officer of H Squared Research, explained that at this point, she doesn’t believe the outbreak will impact commercial dairy prices, “because the scale is small.”

“However if more of the herd is infected, or if production slows because the herd has to recover, or worse they have to dump several millions of gallons of milk, that would have an impact on pricing,” Herzog said.