Category: Livestock Marketing

Highly pathogenic avian influenza (HPAI) has been in the news regularly due to high egg prices and limited quantities of eggs on grocery store shelves. These effects have mostly been driven by large numbers of table egg layers depopulated due to HPAI (see Figure 1). Depopulation is “the rapid destruction of a population of animals in response to urgent circumstances with as much consideration given to the welfare of animals as practicable” (USDA APHIS, 2022). Depopulation is a key response to HPAI and other highly contagious diseases for two reasons. First, HPAI is deadly to poultry, causing high rates of death within a matter of days and rapid spread through a flock given even minimal contact. Second, when HPAI is allowed to circulate in poultry populations it can easily spread to other farms and potentially to farm workers. Despite rapid depopulation of farms where HPAI is detected, ongoing exposure threats exist due to virus circulation in wild bird populations. 

Currently, HPAI circulates in all four wild bird flyways (Pacific Flyway, Central Flyway, Mississippi Flyway, and Atlantic Flyway) that extend across the Western Hemisphere and overlap into the Eastern Hemisphere. For example, the Pacific Flyway overlaps the East Asian and Australasian Flyway. This overlap created the origins of the 2014-2015 Eurasian H5N8 HPAI outbreak in the U.S. from migratory birds moving along the Pacific Flyway (USA APHIS, 2016). HPAI strains mutate rapidly, and most recently in 2024 H5N1 HPAI spilled over into dairy cattle. However, dairy cattle are less susceptible with much lower rates of inflection within herds (<10% of cows), less significant clinical signs, and very low rates of death (AVMA, 2024). This has allowed dairies to isolate and quarantine infected dairy cows until they recover and can be cycled back into production, barring any complications in the cow’s recovery. As a result, depopulation has not been pursued for HPAI control in dairy production. Rather there is a greater interest in the use of vaccination, which is still in the development process and is not commercially viable at this time. 

There are other highly contagious diseases for which depopulation would likely be used to reduce disease spread. The first example is foot-and-mouth disease (FMD), which has not been found in the U.S. since 1929 but circulates in wildlife and livestock populations in other parts of the world. Unlike HPAI, FMD has a low rate of mortality. However, FMD has a very high (almost 100%) rate of infection from relatively low exposure and rapid spread through herds. FMD is also a hardy virus that lingers in an environment for some time. For that reason, FMD is another disease for which the baseline response is depopulation of infected animals. 

The second example is African swine fever (ASF), which is also highly contagious with high rates of spread, as well as serious clinical signs and high rates of mortality among young pigs. ASF response would also likely involve depopulation of infected herds. The danger of ASF to swine industries was highlighted by the outbreak in China in 2018. China is the largest swine producer in the world, and also the largest pork consumer. The estimates of the Chinese swine herd that died or were depopulated due to ASF were reported as 40.5% with a 39.3% decline in the breeding herd (Ma et al., 2021); for perspective, the 12.3 million head death loss in China’s breeding herd was roughly twice the size of entire U.S. swine breeding herd in that same year (6.17 million head). In the following 2 years, as the herd was rebuilt, China depended heavily on imported pork from a variety of trading partners. Neither FMD nor ASF are zoonotic diseases, with the potential to spill over into humans, and neither FMD nor ASF is currently in the U.S. 

Depopulation is expensive, with depopulation costs associated with the destruction of animals, the disposal of contaminated carcasses, and the indemnities to compensate producers for depopulated livestock or poultry. However, this is offset by some benefits, mainly associated with maintaining consumer confidence in the safety of the food supply as well as maintaining access to international markets. For an industry that exports a significant amount of meat or animal product into the world market, the loss of export market share can be very expensive. However, if outbreaks can be constrained geographically export losses can be minimized through the application of regionalization. Regionalization is a general term for allowing trade to continue from disease free areas. Regionalization requires transparent reporting of the disease and eradication measures, which typically includes extensive quarantine, movement restrictions, depopulation of infected premises, and surveillance. Bilaterally, trading countries can place regionalized trade bans of different extents and durations, which could be a control zone within 20 km of an infected herd, a county, or a state or multi-state region. A national trade ban can occur, but is used by fewer countries where proof of geographic containment can be provided. 

Most recently, there is discussion of investing in vaccination strategies for highly contagious animal diseases in order to reduce spread and consequently reduce the need to depopulate. There are a few considerations for vaccination to think about. First, a vaccine needs to match the circulating virus well to be effective. This is why viruses that are fairly stable can be effectively eradicated through vaccination. The highly contagious animal diseases mentioned here mutate quickly. A viable vaccine is available for FMD, and the U.S. has invested in a FMD vaccine bank that can be quickly deployed in the event of an outbreak. However, no approved vaccine is currently available for ASF. The threat of HPAI in both poultry and dairy cattle has accelerated the development of vaccines, and the ability to match an HPAI vaccine is improving even with a quickly mutating virus. Licensed HPAI vaccines are not commercially available and there are aspects of an HPAI vaccination policy that are yet to be worked out. For all of the potential benefits, vaccination will likely come at a high cost also.

Trade partners generally will treat eradication or prevention through vaccination campaigns with similar trade bans to outbreaks. This is because vaccination can prevent signs of clinical illness but may not prevent infection. As a result, extensive surveillance requirements are needed to assure that infection is not being spread to areas outside of the vaccination zone through the movements of animals or products. Bilateral discussions with trading partners will be needed to agree to protocols for ensuring disease freedom status. This can be expensive, both in terms of budget and also in terms of trained personnel to track vaccinated animals. If vaccination is expected to be ongoing due to external disease pressure, as is the case with HPAI in wild bird reservoirs, costs will accrue on an annual basis. The logistics of applying a vaccine may be challenging. FMD and HPAI vaccines require two doses to be fully effective, requiring animals to be handled multiple times. In long lived species like cattle, the vaccination must be repeated for protective immunity. Vaccination is unlikely to ever be used to prevent a disease from entering a country due to these expenses and complex policy implications. However, for a disease like HPAI where risk of introduction is ongoing via wild bird exposures, vaccination may well be a viable response strategy. 

Figure 1. Table Egg Layer Inventory (left axis) and Real Egg Price Per Dozen Egg (right axis) from 2013 to 2024, with HPAI Outbreaks Highlighted In Each Box

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References: 

United States Department of Agriculture Animal and Plant Health Inspection Service (USDA APHIS). 2022. “HPAI response: Response goals & depopulation policy” Available online: https://www.aphis.usda.gov/sites/default/files/depopulationpolicy.pdf

United States Department of Agriculture Animal and Plant Health Inspection Service (USDA APHIS). 2016. “Final report for the 2014–2015 outbreak of highly pathogenic avian influenza (HPAI) in the United States.” Veterinary Services Surveillance, Preparedness, and Response Services Animal and Plant Health Inspection Service. Available online: https://www.aphis.usda.gov/media/document/2086/file

American Veterinary Medical Association (AVMA). 2024. “Avian influenza virus type A (H5N1) in U.S. Dairy Cattle.” Website: https://www.avma.org/resources-tools/animal-health-and-welfare/animal-health/avian-influenza/avian-influenza-virus-type-h5n1-us-dairy-cattle

Ma, M., H.H. Wang, Y. Hua, F. Qin, J. Yang. 2021. “African swine fever in China: Impacts, responses, and policy implications.” Food Policy, 102(102065). 

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Hagerman, Amy. “Depopulation as a Tool for Highly Contagious Animal Disease Control.” Southern Ag Today 5(11.2). March 11, 2025. Permalink

There have been over 20 million commercial table/shell egg laying hens lost already in 2025 alone due to High Pathogenic Avian Influenza (HPAI). Losses have impacted egg supply and prices have spiked. At the time of this writing, nationally, large white shell eggs are over $8.00 per dozen. Discussions over HPAI vaccination have been going on at some level from the beginning of this outbreak in 2022, but just recently a conditional approval has been given for a vaccine to be used here in the U.S. While vaccination holds some promise, it has its own set of problems and costs that must be balanced with the potential gains from controlling the virus. 

As a stopgap measure to boost egg supplies, it has been suggested that surplus eggs from broiler hatcheries could be transferred into the egg products market, replacing shell eggs that could then be sold as fresh, helping lower prices. Eggs that go into egg products are used for things like dressings, sauces, etc. or for powered egg products like cake mixes. These products are pasteurized and considered some of the safest egg products available for human consumption. The surplus broiler eggs come from the occasional over-supply of hatching eggs not being able to be set to hatch. They are currently used for animal feed products or often simply disposed of. At one time, they were allowed to enter the edible egg products market. Using surplus broiler eggs stopped in 2009 when a law specifically targeting normal table egg handling and storage was passed requiring ALL eggs, whether sold fresh or used for egg products, be handled in such a way that precludes the surplus broiler eggs from the process. Now, some are asking the law be rescinded or modified to allow broiler eggs to again be used to help relieve the current egg shortage. 

To analyze this question, we must look at a few big numbers. First, it is estimated by the National Chicken Council that there would be an annual surplus of “…almost 400 million broiler eggs (going) into the egg breaking supply each year…”  That is a lot of eggs, but would it affect the price of table eggs? According to the USDA-Economic Research Service, total table egg production for 2024 was 7,751 million dozen, or over 93 billion eggs. If we assume an even distribution, that’s 7.75 billion eggs being produced per month! If we evenly distribute the surplus broiler egg supply, it could provide an additional 33.6 million eggs per month, or about 0.4% of the monthly total – an amount not likely to make any appreciable difference in the current prices. Still, there is no reason not to add these eggs into the market, but there should be no expectation of any significant price impact for doing so. It would however benefit the broiler companies as a market outlet for eggs that are often a loss. And if a few more eggs hit the store shelves, that’s not a bad thing.

Fig. 1 – Egg prices declined and stayed close to the recent annual average of around $2.00/dz for a couple of months after the most recent spike in January 2023. The current spike far outweighed that spike and will likely not abate for some time.

The February Cattle on Feed report was released this past Friday afternoon and reported 11.7 million head of cattle in feedlots on February 1^st. This was a 0.7 percent decrease from February 1, 2024. Marketings were up 1.4 percent year-over-year. There were no big surprises in the report relative to pre-report expectations, but there were some interesting points in the report. 

Placements of cattle into feedlots during January were up 1.7 percent above January 2024. Weather and winter storms delayed January 2024 placements, so the increase shown for 2025 is partially driven by a lower 2024 number. In 2024, placements were higher in February than they were in January which was the first time that had occurred since 1996. We have not seen those same challenges so far in 2025, but February placements are likely to be impacted by the lingering impacts of the Mexico cattle import ban. 

A regional look at the data implies an impact of the Mexico import ban on January placements. January 2025 placements of cattle into feedlots in Texas were 50,000 head lower than a year ago which is a 14.5 percent decrease. This was offset by a 60,000 head (15.4 percent) increase in Kansas and a 30,000 head (5.9 percent) increase in Nebraska during January.  

The largest increase in placements was in the 700-799 pound weight range which were up 30,000 head (6.3 percent) from a year ago. Placements were up across all weight classes in Nebraska and Kansas and lower across all weight classes in Texas. Placements of cattle into Texas feedlots weighing less than 699 pounds were down 35,000 head during January compared to a year ago. 

The data mentioned above comes from feedlots with at least 1,000 head capacity. However, another interesting part of the February report is the detail about the distribution of cattle across feedlot sizes. There are 2,105 feedlots with at least 1,000 head feeding capacity. These feedlots housed 83 percent of cattle on feed as of January 1, 2025. The remaining 17 percent of cattle on feed were located across the 24,000 feedlots with a capacity of less than 1,000 head. Of the 1,000+ capacity feedlots, there were 80 that have a capacity of 50,000 head or more, and these were home to 35 percent of the total U.S. cattle on feed on January 1.

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Maples, Josh. “February Cattle on Feed.” Southern Ag Today 5(9.2). February 25, 2025. Permalink

USDA will release the February Cattle on Feed report on Friday, February 21^st.  It’s following closely on the heels of the cattle inventory report released at the end of January.  There are several interesting things to look for in this report, including overall placements, the impact of border restrictions on placements in Texas, and the number of cattle in feedlots.

In a sense, marketings and placements are related.  We can think of cattle leaving the feedlot for a packer (marketings), making way for new cattle to enter (placements).  Marketings are estimated to be up about 2.5 percent in January compared to last January.  Given the same number of working days as a year ago, daily average marketings were faster than last year.  

In my pre-report estimates, I expect placements to be about the same as a year ago.  Placements equal to last January would imply a fairly small number of feeder cattle placed compared to marketings.  This estimate balances larger numbers of feeder cattle in the CME feeder cattle index and no cattle entering the U.S. from Mexico in January.  The U.S. imported 107,000 fewer feeder cattle in January 2025.  Feeder cattle imports only resumed in the second week of February, at very low levels compared to last year.  The number of lightweight placements in Texas will provide some good insight into the impact of the ban on placements.  Texas placements in December were down 23 percent, with much of that decline coming in the lightest weight categories.

The combination of larger marketings and no change in placements would pull down the number of cattle on feed on February 1^st to 98.8 percent of the prior February.  Sooner or later, fed cattle supplies will begin to decline dramatically due to fewer calves and herd rebuilding.  The market likely can’t continue to rob Peter to pay Paul by pulling animals ahead and placing heifers, and when that ends, the number of cattle on feed will decline dramatically.  That will lead to another increase in calf and feeder cattle prices this year.

Two other interesting pieces of information will be included in this report.  The February report includes an estimate of total feedlot capacity in the U.S.  We often talk about packer capacity but rarely feedlot capacity.  Feedlot capacity has not been a limiting factor in the market.  This report will also include data on the number of fed cattle marketings and cattle on feed by size of feedlot.  That data provides some insight on concentration in the feedlot sector.  

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Anderson, David. “Fewer Cattle on Feed?” Southern Ag Today 5(8.2). February 18, 2025. Permalink

In a recent Southern Ag Today article, Anderson and Maples addressed increasing slaughter weights in beef cattle while also mentioning slaughter weights are increasing in swine and poultry. In this article, we will address poultry weights, specifically broilers.

Broiler slaughter weight has been increasing, however, the reasons for the increase are different than was outlined in the referenced beef article.  The trend is a long-term situation rather than a short- or intermediate-term phenomenon. Broiler weights have been on a steady increase since the 1920s. The primary driver of these increases is market-derived; it is a slow change based on U.S. poultry consumers’ desire combined with the changing genetic potential of the birds. Unlike the beef industry, where the producers, feeders, and packers are usually separate entities, the poultry companies producing chicken own the chickens and control their genetics and production from the egg to chicken sandwich. 

Most chickens in the U.S. are produced to meet specific market demands, and this requires varying sizes of birds. Grocery store chill-packaged products like split breasts or boneless breasts usually come from birds in the 6– 7-pound range. Fast food chicken restaurants like Popeyes or KFC typically require smaller birds to fill their “pieces” menu. These birds are usually 3.5-to-4-pound slaughter weight. The same companies sell chicken sandwiches that require filets from larger birds of upwards to 9-pound slaughter weight. Frozen processed chicken fingers and sandwich filets at the grocery store are best produced from larger birds as well. As consumers have demanded more chicken sandwiches, chicken fingers, breast filets, etc., and fewer whole birds or cut-up pieces, poultry companies have moved their genetic target toward producing birds that more efficiently meet these demands per square foot of grow-out space. Simply put, you can get more chicken fingers per square foot of grow-out space from a bigger chicken. This demand has pushed companies to produce more of the larger birds and increase the size of the larger birds (Fig 1). Since companies own the chickens and control the genetics and production, they can make these changes in response to consumer trends quickly and sustain those changes over time. From 1955 to 2021, the combined average of all broiler sizes in the U.S. increased from 3 pounds to approximately 6.5 pounds, or 116%, in response to U.S. consumer demands. But that’s not the whole story. Along with increasing weights, the poultry industry has decreased the amount of feed needed by 38 percent, from 3.0 pounds to 1.85 pounds of feed per pound of gain. The time it takes to achieve average market weight has decreased by about 20 days. Overall mortality has also decreased, though recently a change in production methods has caused a slight uptick in mortality (Fig 2). All these changes have been achieved by foundational efforts in genetics, nutritional advances, and grow-out environment/housing improvements. Overall, this represents a case study in sustainability – producing more output with fewer inputs. In commercial poultry’s case, that means more chicken for less feed, over less time, with less environmental impact.  

Fig 1. Broiler weights (bird size) have increased a remarkable amount from the 1950’s to the modern bird of today. These changes have been the result of focused genetics, improved nutrition and bird environment.

Fig. 2: From 1955 to modern day, average broiler weights have increased by 116 percent. At the same time, feed conversion has improved by 38 percent. Days of age to slaughter have also decreased by 27 percent, and mortality by 21 percent.

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Brothers, Dennis. “Increasing Size in Broilers – A Long-Term Trend.” Southern Ag Today 5(7.2). February 11, 2025. Permalink