How Worried Should We Be About Bird Flu?

You've switched onto this podcast to no more. Well, did you know that when you switch to IG trading, you get access to more? Over 18,000 markets from around the world, actually. So, switch on to Australia's number one trading platform for FX and CFDs, 17 years and counting. The Bloomberg Australia podcast is brought to you by IG Trading. CFDs are high-risk products, refer to our PDS and TMT on IG.com. IG Australia proprietary limited. IFSL 515106. Get the latest news from around the world delivered to you in an instant. Subscribe to Bloomberg News now and get news when you want it on your schedule. These are short audio reports on the day's top stories that you can listen to in just a few minutes. Make Bloomberg News now your trusted source for the latest global headlines with context. It's available 24 hours a day, anytime you need it, ride on your smartphone or smart speakers. Subscribe to Bloomberg News now today on Apple Podcasts, Spotify or anywhere you listen. Hello, I'm Rebecca Jones and welcome to the Bloomberg Australia podcast. This week, Australia's battle with supermarket inflation may be facing a new threat. Bird flu is spreading among Australia's wild birds, with deaths surging in recent weeks and cases now detected across five states. So how worried should we be? And where could the economic fall out in hardest? I'm joined by Melbourne-based Agriculture reporter Ben Westcott to look at what previous outbreaks can tell us about what may be in store here. Ben, thank you for joining me and welcome back to the podcast. Good to be back, back. Ben, where does the bird flu outbreak in Australia currently stand? How far has it spread and how likely is it to reach a commercial poultry farms? Currently, there are 231 cases in Australia, although that might change any day now. As it's always wretcheding up. Now, 231 doesn't sound like very much. I was recently talking to my boss who remembers the outbreaks in the US that will come back to later when millions of birds were affected. And so when I said that they were tripling in the space of just a week, she was like, "Oh, 231 cases, that's not very many." But if you consider how fast it's growing, this is a massive change in just a small short period of time. Just two weeks ago, we only had 27 cases. So it's increased by about 10 times in just the space of two weeks. And of course, a month and a half ago, we didn't have any cases at all. Now, currently, they're mostly in South Australia and Victoria, which is where a huge number of Australia's egg and poultry farms are located. But they're also in Western Australia, in New South Wales, and then finally in Queensland as well. Now, in terms of how likely this is to enter our poultry farms, what the experts are saying is that once it actually arrived in Australia, it was almost inevitable that it was going to start spreading among local wildlife. It's very hard to separate wild birds or direct them where to go. I think there's a lot of songs about that. You can't do that. When it comes to poultry farms, you do have a modern economy of control. And they have been preparing for this. So while it's highly likely they are going to spread to poultry farms, it isn't 100% that we might not be incredibly lucky and miss. And what are governments and poultry producers themselves doing to keep the virus out of these commercial flocks? So in many ways, Australia has been very lucky up until now, where the last continent to be infected by the bird flu. Many other countries have had this for a very long period of time. And that long leeway, America has this as far back as 2022. So that long leeway has given us a long time to prepare for this coming to our country, which means that poultry producers have managed to set up a number of biosecurity regulations to protect their birds. So things like effectively sealing them in. So that wild birds can't come and contact them, passing on the virus, protecting their food sources, protecting their water sources, and obviously putting in place some of the security regulations that people would be very familiar about after COVID, things like PPE and stuff like that for employees. Sealing them in. How does that work with free-range chickens? What a glass dome above the yard? What a great question. No, it was so, in fact, free-range chickens are possibly going to have to be housed. And this is something that we've already seen in Victoria. They issued on Friday a housing order for free-range chickens that they must mandatoryly be brought inside. And that means that they can be protected from contact with wild birds and thereby reduce the spread of the virus. So for a while in Australia, depending on what state governments do because it's their decision not the federal government, we might have a very severe reduction in number of free-range birds we have. A housing order has sort of dystopian undertones, doesn't it? Ben, if the bird flu does enter the commercial poultry industry here in Australia, where would we as consumers first notice shortages? Is it going to be through higher prices or purchase limits? And how quickly could this happen? It could be any of the above. So let me take you back to the US outbreak I mentioned before. That took place starting in 2022. And it did rapidly infect domestic poultry flocks. And in the end, that spread to millions and millions and millions of birds. And what you saw by the end of 2022 is that egg prices had spiked. They doubled in the space of a year. Then they went down again. But then when there was another even larger outbreak in 2025, they went to triple the amount they had originally been. So eggs are very severely affected by these bird flu outbreaks. Chicken meat prices, not so much. But there's no doubt that this is something that Australians have seen before. Pickingly after COVID, there was a little bit of those constraints, piquly in places like the ACT. Our camera listeners will be very familiar with the restrictions that were put on purchase of eggs there. What this means is that while in general, you know, people can probably deal with paying a bit more for their eggs, this comes at a time of very high inflation across the board for Australia. You know, we're well above the RBA's target, hence all the rate rises to try and drag that back under control. So any additional causes of inflation outside of fuel and plastic prices, which are obviously going up, I guess going to add even more heat to that fire and make life just a little bit more difficult for every day Australians. I think that's really fascinating that you said that the price shock would be felt in egg prices, but not so much in chicken meat. Can you explain why that would be? So it's a combination of two things. Firstly, chickens that we eat and chickens that lay the eggs are kept separately from each other. So they're not necessarily in the same place, which means when one flock is affected, the other one possibly won't be. But in addition to that, the maturity cycle for egg-laying chickens is a much longer cycle. It takes more time to replenish those stocks of egg-laying birds compared to the meat birds, which have a much shorter maturity. So it's much harder for farms to replace the egg-laying chickens and it is for them to replace the meat chickens. And those chickens that are bred just for meat, they can turn them over pretty quickly, right? Like six to eight weeks or. It's much shorter than they is for the egg chickens, yeah. Well, that does make sense. Ben, I'm interested also in who ultimately is carrying the financial cost here, when the commercial flocks of chickens have to be cold. Is it as simple as farmers and insurers or does that cost show up in farms of the retailers and us as the end consumers? It'll show up everywhere. So, of course, some of it will come down to consumers. I mean, already egg prices in Australia are quite high. I mean, I'm sure we've all been down to the supermarket and spent 12, 13, 14 dollars on a dozen eggs. And that will likely rise as the birthflow outbreak gets worse if it does get into our poultry industry. But yes, there's no doubt these will be felt all down the food chain. It's like the plastic resin shortages that we've seen around the region as a result of the straight-of-horn mousse. So, you know, when you can't package milk, for instance, in the case of the dairy industry, that impacts the farmer who can't sell the milk, that impacts the packageer, who can't package the milk up and it can't get the resins, or the cheap price to make the milk, and it impacts the customers who eventually have to buy the milk. So, you know, when you have these shortages, the prices go up all through the supply chain and everyone's up. We might be having a break, but the news never switches off. That's why with IG trading, you can trade around the world, around the clock, including weekends. Switch to the multi-award-winning platform that continues to be Australia's number one for FX and CFDs, 17 years and counting. Visit IG.com to switch in minutes to IG trading. CFDs are high-risk products, refer to our PDS and TMD on IG.com, IG Australia Propriet Ltd, AFSL 515106. Hi, I'm David Weston. Join me every week for the Wall Street Week podcast to hear stories of capitalism from around the world, from geopolitical tensions and central bank decisions to artificial intelligence, energy, and infrastructure. We sit down with the CEOs, economists, policy makers, and thought leaders, whose decisions are shaping markets everywhere we find them. Subscribe to the Wall Street Week podcast on Apple, Spotify, or anywhere you listen. I just want to pick up on something that you said that then go back to the 2022 example in the US because That incident also affected dairy cows. Australia and New Zealand both have substantial populations of cows. How could that show up here and in what lessons can we learn from what happened in the US? Sure. I mean, it's going to be particularly worrying for New Zealand, which has such a vital dairy industry. It's dairy industry is a major part of its economy. Now, there's good news and bad news here. So I'll start with the bad news, which is that, as you mentioned, in the US, we saw the bird flu infect mammals. And this has been one of the reasons why this particular type of virus has been so devastating around the world is that it isn't just limited to birds. It gets into various mammal species. And one of those in the US was dairy cows. And that was how we believe in some cases it transmitted to humans. And we have had a small number of human cases of bird flu in the US about 70 or a bit more than that. Now, that was very bad for the US dairy industry. It was, it was, bird flu was found in the raw milk, which severely impacted them. Now, the thing that scientists are saying in Australia is that the strain of bird flu here is not as, is not the type that we found in the US. And therefore, the dairy industry probably doesn't have as much to worry about as their US counterparts. Now does that mean they're completely safe? Absolutely not. And I think as this virus spreads more in Australia, one of the things that will be very closely watched by scientists, government and the agricultural industry will be how this strain of bird flu affects mammals and how quickly it spreads amongst some of Australia's very unique mammal species. We already know that something quite similar to this was found in the Antarctic Islands, where devastated researchers talked about just beaches and beaches of dead seals who had been killed by this virus. It's not how the question we see something like that in Australia. And if so, how does that affect the agricultural industry? Does it get into our beef cattle, our dairy cattle? You know, all these are questions that are still to come. Cracky Ben, you're talking about this so calmly, but I have to remind you that you and I are also mammals. So that's terrifying. Who are you talking to about this Ben? Are you getting out to the egg farms themselves? Are you talking to the investors? Are they particularly worried about this? What are they telling you on the street? Yeah, I mean, I've spoken to everyone from some of the major egg producers in Australia all the way down to the experts, the coal face, sort of dealing with this. And I mean, I think everyone is very sad about the fact that it has come to this. I mean, it was always somewhat inevitable that the bird flu was going to reach Australia's shores. I think everyone kind of felt that. But now it's here. There is concern about where it could go, particularly because it is such an unpredictable virus. As they were saying to us in a briefing last week, in some countries, this has become a sort of seasonal thing, almost like the cold for human beings, like some, the birds get sick during some months. And then it goes away and then it comes back again the next year. And then in some other countries, it just ravages the country. It doesn't leave. There's still some regular cases all year round. So because of that, we don't know exactly where the virus is going to go from here. We could end up with thousands, hundreds of thousands of cases in Australia's native wildlife. We could see in the poultry industry. We could see it in endangered mammals. Or by this time in a few months, it might have vanished and only come back next season. And it's that uncertainty that makes planning for this so difficult for governments. So difficult for companies and so difficult for everyday Australian. And I guess on a brighter or at least a more predictable note, it's important to mention too Ben, that there is a vaccine. How is that roll out going? There is a vaccine and it's already being administered as of today or to captive native wildlife species. So the plan is that they will vaccinate species of particularly endangered wildlife in captivity in states. And they'll be up to the states of the side, which animals get administered to begin with. And then they'll decide where they go from there. One thing we do know is that there aren't plans at this stage to vaccinate egg laying animals or meat animals at this stage. It will just be native wildlife species. Ben, finally looking ahead what are some of the key developments or key points that we should be keeping an eye on over the coming days and weeks around this issue? Yeah, I mean, look, there are three different things. I think what you've been looking at for the first is that Australians as a population love our native wildlife. We love our birds and the dawn chorus. And I think even if the poultry industry remains infection-free, it will be a very traumatic time for many Australians seeing potentially large numbers of dead pelicans, dead ducks, fairy penguins could be affected in all the way down to magpies and kukapara. So, you know, there's a wide variety of birds that could be affected by this. Of course, there's the poultry industry, which is the next level. And I think the government and the agricultural industry were watching very, very closely for that first infection, that sort of indicates it's got into the system. And once that happens, things could move quite fast from there. And then finally, of course, there's always the chance of a human infection. And, you know, this is a good chance to remind people that the government says, if you see a dead or sick bird do not approach the bird, just alert authorities to its location report what you saw and go from them. If you found today's conversation insightful, be sure to follow the Bloomberg Australia podcast wherever you listen. And for more on Australia's agricultural sector, including the latest reporting from Ben Westcott, head over to Bloomberg.com. This episode was recorded on the traditional lands of the Warbundery People. It was produced by Paul Allen and edited by Chris Burke and Anseli Chandler. I'm Rebecca Jones. We'll see you next week. Get essential news on the people and companies pushing the tech sector to new frontiers. Hi, I'm Ed Ludlow. Join me for Bloomberg Tech, a daily podcast focused exclusively on technology, innovation and the future of business. Every weekday we bring you the latest insights on Silicon Valley's top companies and conversations with tech's biggest decision makers. Listen to Bloomberg Tech on your commute home and stay ahead of the news cycle. Subscribe today on Apple, Spotify or anywhere you listen.