Companies and workers record losses due to avian flu

As the poultry industry battles a severe outbreak of the highly pathogenic avian influenza (HPAI), major producers are recording a huge financial loss, with job losses also under way.

This comes as the sector was also bearing the brunt of load shedding, which pushed up operational costs.

One of the largest producers, Astral Foods, described the bird flu outbreak as the worst that South Africa had witnessed and goes well beyond the impact felt by the H5N8 bird flu in 2017.

“To date, the total cost associated with the current bird flu outbreak amounts to approximately R220 million,” said Astral CEO Chris Schutte.

Astral said it also had to bear additional costs related to load shedding, which were forecast at R919m for the remainder of the financial year.

“The total costs of load shedding, including capital costs of R200m, for the Group for the financial year will amount to approximately R1.9 billion,” added Schutte.

Quantum Foods estimated the value of the layer and breeder stock affected by the deadly disease from the April and current outbreaks to be worth R138m.

“The full financial impact on the company is not yet known as it will depend inter alia, on the volumes of eggs available for sale,” said Adel van der Merwe, executive for Nulaid Eggs & Farming Operations.

She said the HPAI outbreak affected 1.9 million of the company’s layer and breeding stock and was now looking to import either day-old chicks (DOC) or hatching eggs to ensure that the breeding stock recovered as soon as possible.

Van der Merwe also warned that unless the government allowed for the movement of eggs from hens that had recovered from HPAI, it might take up to 12 to 18 months for the egg supply to recover.

She added that the situation had forced the company to lay off some workers.

“Lay-off processes have commenced at two of our pack stations and one retrenchment process at a third pack station.”

Professor André Jooste from the Department of Agricultural Economics at Stellenbosch University said from a food security point of view, the avian flu was likely to have a huge impact.

Statistics showed that poultry was the most consumed and cheapest source of protein in South Africa, with a consumption per capita of about 40kg per head compared with other types of meat.

People from lower income groups spend about 35% of income on food. The supply of chicken and eggs will be lower, so the prices will likely go up, said Jooste.

The South African Veterinary Association called on the government to permit the immediate importation of HPAI vaccines targeting H7 and H5 influenza viruses.

“Given the critical nature of the situation, SAVA urges that these vaccines be evaluated for emergency importation to address the crisis promptly,” said SAVA chairperson of the Poultry Group, Dr Wilhelm Maré.

He said the approval for the import of the vaccines should be expedited.

“While these vaccines may not have been fully tested against local HPAI strains, their immediate use is vital during this severe emergency,” he added.

Maré said despite rigorous biosecurity measures in place, the spread of the HPAI had proven relentless.

According to the Department of Agriculture, Land Reform and Rural Development (DALRRD), the Western Cape was the hardest hit with regards to the HPAI H5 outbreaks, with millions of birds culled.

Spokesperson Reggie Ngcobo said the department had facilitated the importation of fertile eggs for the broiler industry.

“A similar request for the table eggs will be considered if received. With regards to vaccination, the department met with vaccine registration regulators and the agreement reached is that the registration of vaccine will be fast-tracked, but the safety, efficacy and quality will not be compromised,” he said.