Date of Graduation

5-2017

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor

H.L. Goodwin, Jr.

Committee Member

Lawton Nalley

Second Committee Member

Karen Christensen

Third Committee Member

Fred Clark

Keywords

Social sciences; Biological sciences; Avian influenza; Disease; Economics; Poultry

Abstract

Highly Pathogenic Avian Influenza (HPAI) presents a substantial economic risk to the poultry industry. Domesticated fowl contract HPAI initially through exposure, direct or indirect with migratory waterfowl and outbreaks can result in significant economic losses to growers and the poultry industry at large. A HPAI outbreak occurred in Minnesota and Iowa and spread across over 13 other states in 2014 and 2015. This caused an estimated $1.6 billion in losses (CDC, 2016) and led to shortages of eggs and turkeys together with elevated prices (Anni et al. 2005). Even small outbreaks of HPAI inflict substantial damages as USDA-APHIS guidelines necessitate a 10-km radius quarantine area and possible cull from the site of infection. Previous literature evaluates economic damages from AI predominantly using case studies of past outbreaks, but a priori estimation of potential economic losses resulting from HPAI outbreaks in critical industry regions has been given less attention. We assess economic damages to poultry growers, companies, and the federal government resulting from a simulated HPAI outbreaks across spatially specific poultry house locations in the high-value poultry-growing region of Washington and Benton counties in Arkansas. With a simulation model built using Statistical Analysis System (SAS 9.4), we assigned poultry operation types (Broilers, Breeders, Pullets, Turkeys, and Layers) to facilities using discrete non-uniform probabilities from known county-level poultry type distributions reported by USDA. A single facility is randomly infected with HPAI, and houses within the quarantine zone are identified based on a distance matrix calculated in a GIS (ArcGIS for Desktop 10.4). The value of economic damages is determined using mean bird values by poultry type on the lifecycle of the birds. Because the total damages and number of impacted houses depend on house types and the location of the initial infection, we ran the model one thousand times with the location of infection randomly to account for spatial variability. Results show that on average, an infection in Benton or Washington County, impacts 162 poultry houses, including Broiler (119), Pullet (7), Breeder (17), Brown Layer (2), Turkey (16), and White Layer (1) houses, the federal government through indemnity payments incurs the greatest economic losses ($57.4 million), while poultry companies and grower incur $17.3 and $3.1 million, respectively, in opportunity costs from quarantine time.

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