Michigan organic hens culled over bird flu

At least 2mn head of organic egg layers have been culled by egg producer Herbruck's Poultry Ranch in Michigan because of an outbreak of Highly Pathogenic Avian Influenza (HPAI), according to market sources.

The US Department of Agriculture's Animal and Plant Health Inspection Service (USDA APHIS) has detected HPAI in Michigan poultry operations in recent weeks. APHIS data indicates that 4.076mn head of poultry were culled in Ionia County, Michigan, where Herbruck's is located, during the first two weeks of April.

Argus estimates that 2mn head of organic egg layers consume about 4,500 bushels of organic corn and 63 short tons of organic soybean meal per day. Herbruck's operations are not expected to return to normal until late summer or early fall, which would lead to deliveries of organic corn and soybean meal being delayed or shifted to other buyers until mature replacement egg layers can be raised. Herbruck's did not immediately respond to a request for comment.

The cullings are expected to have a sizable impact on the Michigan organic corn market, as Herbruck's is among the largest users of organic corn in the region, according to market sources.

Deliveries of old crop organic corn contracts are being delayed and rolled forward to the fall 2024 new crop for delivery, the source said. With the rolling forward of old crop contracts, some new crop 2024 contracts have been canceled outright, they said.

According to industry contacts, organic corn deliveries being pushed from old crop to new crop has left farmers in the region concerned about having sufficient storage space for new crop corn come harvest. As a result, organic farmers in Michigan are expressing interest in taking lower bids that previously received little interest in order to clear old crop out of their bins. The rush to sell old crop organic corn could boost liquidity in the market, especially from the sell side, and apply further bearish pressure to the market as farmers compete to clear out bin space.

The Argus Corn Belt delivered spot price for feed grade organic corn fell by 4¢/bushel in the week ended April 6 to $7.25/bushel.

The H5N1 variant of HPAI was discovered in the first commercial poultry flock in February 2022. In March this year, HPAI was confirmed in US dairy herds, with confirmed dairy cases in seven states as of 11 April.

By Alexander Schultz