During the last major avian flu outbreak, the United States lost
nearly 50 million birds — the majority of which were chickens — and suffered great economic pains. The loss of eggs and poultry pushed prices to record
and long-term highs,
inspired bans on American exports to effectively quarantine the strain and discriminately ravaged industry shares.
Between December 2014 and June 2015, Sanderson Farms, Inc. (NASDAQ: SAFM) shares fell as much as 28 percent, and Pilgrim’s Pride
Corporation (NASDAQ: PPC) plunged 47.3 percent.
Somehow, Tyson Foods, Inc. (NYSE: TSN)
escaped unscathed. In fact, its relatively steady shares saw moderate increases over the period.
When Immunity Fails
But Tyson’s luck may have run out.
The poultry
industry is under siege once again with a fresh outbreak of avian flu, and on Monday, a Tyson farm in Tennessee was forced to
euthanize 73,500 birds. While the company said it did not expect disruptions in its chicken line, investors weren’t so certain.
Shares were trading down 2.2 percent.
Meanwhile, Sanderson Farms was trading down 2.4 percent, and Pilgrim’s Pride dropped as low as 3.1 percent before rebounding to
trade down 1.4 percent.
Hormel Foods Corp (NYSE: HRL) shares —
which remained unaffected by the previous scare — dropped in value by 1.3 percent.
What’s The Expected Impact?
The early stages of the outbreak can prompt a rise in prices as supply diminishes, Angie Setzer told Benzinga in January.
However, once the disease is controlled, it’s generally over quickly, and prices return to normal levels.
Related Link: What We
Learned From The Last Avian Flu Outbreak
Related Link: Is
Tyson Foods Bawking The Chicken Trend?
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