Background Recently, the Tennessee poultry industry experienced on farm occurrences of avian flu in flocks in

Transcription

1 Es mated Economic Impacts from Avian Flu in Tennessee: 10 Percent, 15 Percent, and 25 Percent Infec on Rate Scenarios AGRI Industry Modeling & Analysis Group Background Recently, the Tennessee poultry industry experienced on farm occurrences of avian flu in flocks in both Lincoln and Giles coun es. The par cular avian flu strain was classified as H7 HPAI. Once detected, affected farms were depopulated and a 6.1 mile quaran ne zone was implemented to stem the spread of the virus. Given the importance of the poultry industry to the state, it is helpful to industry organiza ons, policymakers, and other industry stakeholders to have measures of how an outbreak of avian flu might impact the economy within poultry producing regions of the state. As such, this analysis provides es mates of the poten al economic impacts from an outbreak of avian flu under the hypothe cal scenarios of infec on rates of 10, 15, and 25 percent for broiler and layer opera ons in a nine county area of poultry produc on (south central por on of Middle Tennessee). In order to es mate the po ten al economic impacts of an avian flu occurrence, informa on about produc on and expenditures by representa ve poultry opera ons are used, along with IMPLAN, an economic input output model. Based on the most recent Census of Agriculture (2012), Tennessee has 7,257 poultry farms (Figure 1) with the majority classified as layer opera ons at 6,487, and 1,033 classified as pullets and 1,026 as broilers (a poultry opera on may have more than one classifica on). For this same meframe, poultry and egg sales was es mated at $552.0 mil lion (USDA/NASS, 2014). In 2015, Tennessee was ranked 16th in the na on in cash receipts for broilers, 34th for chicken eggs, 11th for farm chickens, and 21st for poultry and eggs (USDA/ ERS, 2017). IMPLAN, the input output model used to es mate the economic impacts, indicates that economic ac vity in Ten nessee for 2014 for poultry/egg produc on was es mated at $696.1 million and $1.9 billion for poultry processing (Table 1). Jobs were es mated at 2,674 and 6,468 for poultry/egg pro duc on and poultry processing, respec vely. Based on the state s total economy of $613.4 billion and 3.7 million jobs, poultry/egg produc on and poultry processing represents 0.1 Figure 1. Loca on of Poultry Farms in Tennessee and 0.3 percent, respec vely, of the total economic ac vity, and Source: USDA/NASS, 2014 Table 1. Propor on of Economic Ac vity and Jobs from Poultry/Egg Produc on and Poultry Processing for Tennessee and Study Region (2014$) Study Areaa State Economic Ac vity Sector (Million $) Percent Poultry/Egg Produc on Poultry Processing Economic Ac vity Jobs (Number) Jobs Percent (Million $) Percent (Number) Percent $ , $ $1, , $ , Total Economy $613, ,747,005.7 b Commodity Agriculture $4, Animal Slaughtering/Processing $4, c a $26, , b 11, c 158,361.3 $ b 10, b $ c 2, c Bedford, Franklin, Giles, Lawrence, Lincoln, Marshall, Maury, Moore, and Wayne; b Compared to poultry/egg produc on; c Compared to poultry processing 1

2 0.1 and 0.2 percent, respec vely, for jobs. For commodity agriculture for the state, poultry/egg produc on represents 15.9 percent of the economic ac vity and 3.7 percent of the jobs. For Tennessee s animal slaughtering and processing industry, poultry processing represents 38.9 percent of the economic ac vity and 55.2 percent of the jobs (IMPLAN Group, LLC, 2014). For the state in 2012, the number of broilers are es mated at 30.4 million, with layers and pullets es mated at 1.6 million and 1.0 million, respec vely (USDA/NASS, 2014). In 2016, approximately million birds were processed in Tennessee (USDA/NASS, 2017). Based on the 2012 Census of Agriculture, most of the poultry farms are located in south central Middle Ten nessee (previous Figure 1). The modeling region for this analy sis includes the coun es of Bedford, Franklin, Giles, Lawrence, Lincoln, Marshall, Maury, Moore, and Wayne (Figure 2). This mul county region s total economic ac vity is es mated at $26.1 billion and 158,361 jobs (IMPLAN Group, LLC, 2014) (Table 1). Compared to the mul county region s total econo my, poultry/egg produc on represents 31.7 percent of the economic ac vity and 7.8 percent of the jobs. Compared to animal slaughtering and processing, poultry processing repre sents 90.2 percent of the economic ac vity and 94.8 percent of the jobs. For the mul county region, the number of broilers are es mated at 9.56 million, with layers and pullets es mated at 425,875 and 272,737, respec vely. Assuming this same ra Figure 2. Loca on of Study Area in Tennessee o of birds processed, 97.5 million birds are es mated to be processed annually within the study region. Stages of Poultry Produc on The es mated economic impact scenarios presented are for individual layer and broiler opera ons, plus for a layer hatchery broiler opera on and a layer hatchery broiler processor opera on with each under a 10 per cent, 15 percent, and 25 percent infec on rates. The economic indicators used to measure the es mated economic impacts to the study region include changes in total industry output (a measure of economic ac vity), changes in em ployment, changes in value added, and changes in labor income. Each of these economic indicators are es mated through direct, indirect, induced, and total effects (see IMPLAN Metrics discussion on page 3). In addi on, this anal ysis uses the Local Purchase Percentages (LPP) op on available in IMPLAN modeling. As a result, this affects the direct impact values applied to the mul pliers. Instead of a 100 percent direct expenditure value applied to the mul plier, the purchasing pa erns in the IMPLAN model are used. These LPP values account for purchases by the poultry opera ons (in this case) from businesses outside the study region (don t contribute to the mul plier process) versus pur chases from businesses in the region (i.e., in region spending). Labor or proprietor s income was assumed to 100 per cent local. All values indicated are in 2017$ unless indicated otherwise. Stylized Poultry Layer Opera on According to the most recent Census of Agriculture, the state had 1.6 million layers on 6,487 farms in 2012 (Figure 3). Most farms according to the Census had layer inventories of 1 to 49 birds (USDA/NASS, 2014). Based on a poultry layer budget for contract growers, a stylized layer opera on was designed (NC State, 2003). The assump ons for this stylized layer opera on include: 1) square feet of the house is 33,600 (42 feet x 400 feet); 2) number of houses is two; 3) the economic impact is for six months; 4) length of the produc on cycle is 40 weeks; 5) the dura on of the growing (finishing) season is four weeks; 6) females and males per placement are 16,730 and 2,007 (18,737 total), re spec vely; 7) eggs/cycle are 231,758 dozen; 8) hatching eggs are 226,146 dozen; 9) market eggs are 5,612 dozen; 10) hatchability (to 65 weeks of age) is 83.9 percent; and 11) feed conversion (to 65 weeks of age) is 6.66 pounds of feed 2

3 per dozen eggs. Based on the layer budget, total revenue was es mated at $127,213, with variable and fixed costs es mated at $38,806 and $73,021, respec vely. Net income is es mated at $15,386. As a result of an avian flu outbreak, the mul county region would likely experience nega ve economic im pacts from both the poultry layer opera on (inputs not pur chased for produc on) and for loss of producer s income. Eco nomic ac vity that would not otherwise occur is for eradica on of the virus. According to USDA s Animal and Plant Health In spec on Service (APHIS), flat rate payment for elimina ng HPAI is $6.45 (2015$) per layer (USDA/APHIS, 2017). Ac vi es APHIS used to calculate the flat rate are barn prepara on, cleaning, Figure 3. Number of Layers in Tennessee and hea ng of the barns for a minimum of three consecu ve Source: USDA/NASS, 2014 days to help eradicate the virus. Based on North Carolina s enterprise budget, the direct impact to the study region s economy is es mated at $111,827 (sum of variable and fixed costs). However, for IMPLAN analysis, the es mated direct expenditure for eco nomic impact analysis is $72,688 ( $111, (length of produc on cycle 26 weeks 40 weeks)). In addi on, an es mated $14,399 of the variable and fixed costs input purchases normally imported into the region (LPP ranged from a low of 44.0 percent to 95.7 percent) will not occur. For the direct impact for elimina ng the HPAI virus $126,052 ($ ,737 layers 2017 inflator) the LPP was es mated at 53.2 percent ($67,072 in 2017$). The es mated economic impacts for an avian flu occurrence for a layer opera on based on assump ons and prices are presented in Table 2. Using the produc on scenario as the discussion reference, the es mated direct and total impacts (economic ac vity) are $57,631 and $84,933, respec vely. Employment impacts are 0.4 direct and 0.6 for total. Total labor income and value added are $25,349 and $34,839, respec vely. Table 2. Es mated Six Month Economic Impacts from Avian Flu Occurrence for Stylized Poultry Layer Opera on for Produc on, Producer s Income, and Virus Eradica on for Study Region. Impact Type Total Industry Outputa Employment Labor Incomea Total Value Addeda Direct Total Direct Total Direct Total Direct Produc on Loss ($57,631) ($84,933) (0.4) (0.6) ($17,476) ($25,349) ($21,120) ($34,839) Producer s Income Loss ($82,689) ($126,603) (1.0) (1.4) ($82,689) ($95,341) ($82,689) ($106,408) $67,075 $93, $35,928 $43,217 $42,053 $55,786 Virus Eradica on a Total 2017$ Mul pliers measure the addi onal total industry output or employment for an addi onal million dollars in eco nomic ac vity. The total industry output mul pliers for produc on and virus eradica on are es mated at 1.47 and 1.39, respec vely. Interpreted, for every dollar loss in layer produc on, an es mated addi onal $0.47 of economic IMPLAN Metrics: Total Industry Output economic ac vity and represents the es mated annual dollar value of produc on summed across all industries. Employment the es mated number of total wage and salary employees (both full and part me), as well as self employed. Labor Income employee compensa on (wages and benefits) and proprietor s income. Total Value Added the es mated dollar values of wages and salaries including benefits, self employed income, interests, rents, royal es, dividends, profits, plus excise and sales taxes. Impact Types: Direct Impacts the es mated economic impacts of ac vi es from poultry producers, producers incomes, and APHIS virus eradica on. Total Impacts the sum of direct impacts, plus the es mated economic impacts from input purchases such as electricity, feed, building/equipment repairs, insurance, etc. providing goods and services (Indirect Impacts), and increased expenditures of new household income (Induced Impacts) as a result of poultry producers produc on expenditures. 3

4 ac vity was lost throughout the mul county region. The employment mul pliers are 1.50 and 1.10 for produc on and virus eradica on. For every job lost based on the layer produc on s decreased expenditures, an addi onal 0.50 jobs are es mated to be lost in other industries throughout the mul county region. For layer produc on, the top five industries nega vely impacted for total industry output are es mated to be maintenance and repair construc on of nonresiden al structures, electric power transmission and distribu on, nondepository credit intermedia on and relat ed ac vi es, other local government enterprises, and support ac vi es for agriculture and forestry. For virus eradica on, the top five industries posi vely impacted for total industry output are es mated to be support ac vi es for agri culture and forestry, owner occupied dwellings, wholesale trade, pes cide and other agricultural chemical manufac turing, and limited service restaurants. Stylized Poultry Broiler Opera on For broilers, the state had 1,026 farms with 30.4 mil lion birds in 2012 (Figure 4) (USDA/NASS, 2014). Like layers, a stylized broiler opera on was defined based on a University of Maryland Extension publica on budget (Rhodes et al, 2011). The assump ons used to es mate the broiler house economic impacts are: 1) square feet of the house is 33,000 (60 feet x 550 feet); 2) the economic impact is for six months; 3) opera on has 484,000 birds per year; 4) birds per flock are 88,000; 5) flocks per year are 5.5; 6) number of houses is two; and 7) bird density is Based on the broiler budget, total revenue was es mated at $143,646, with variable and fixed costs es mated at $34,973 and $69,898, respec vely. Net income is es mated at $38,774. As a result of the avian flue outbreak, Figure 3. Number of Broilers in Tennessee the mul county region would experience nega ve economic Source: USDA/NASS, 2014 impacts from both the poultry broiler opera on (inputs not pur chased for produc on) and for loss of producer s income. Posi ve economic impacts would be experienced for eradi ca on of the virus. According to APHIS, flat rate payment for eradica ng HPAI is $1.15 (2015$) per broiler (USDA/ APHIS, 2017). As previously men oned, ac vi es APHIS used to calculate the flat rate are barn prepara on, cleaning, and hea ng of the barns for a minimum of three consecu ve days to help eradicate the virus. Based on the broiler budget, the direct impact to the study region s economy is es mated at $104,871 (sum of variable and fixed costs). However, for IMPLAN analysis, the es mated direct expenditure for economic impact analysis is $52,436 ( $104,871.5 (six month impact)). In addi on, approximately $19,972 of the variable and fixed costs input purchases normally imported into the region (LPPs ranged from a low of 4.4 percent to 95.7 percent) will not occur. For the direct impact for eradica ng the HPAI virus $105,553 ($ ,000 layers 2017 inflator) the LPP is es mated at 53.2 percent ($56,165 in 2017$). The es mated economic impacts for an avian flu occurrence for a broiler opera on based on assump ons and prices are presented in Table 3. Using the produc on scenario as the discussion reference, the es mated direct and total impacts (economic ac vity) are $31,137 and $44,849, respec vely. Employment impacts are es mated at 0.2 direct and 0.4 for total. Total labor income and value added are es mated at $13,456 and $19,936, respec vely. The total industry output mul pliers for produc on and virus eradica on are 1.44 and 1.39, respec vely. In terpreted, for every dollar loss in broiler produc on, an addi onal $0.44 of economic ac vity was es mated to be lost throughout the mul county region. The employment mul pliers were 2.00 and 1.12 for produc on and virus eradica on. For every job loss based on the broiler produc on s decreased expenditures, an addi onal 1.00 jobs are es mat ed to be lost in other industries throughout the mul county region. For produc on, the top five industries nega vely 4

5 Table 3. Es mated Six Month Economic Impacts from Avian Flu Occurrence for Stylized Poultry Broiler Opera on for Produc- on, Producer s Income, and Virus Eradica on for Study Region. Impact Type Total Industry Output a Employment Labor Income a Total Value Added a Direct Total Direct Total Direct Total Direct Total Produc on Loss ($31,137) ($44,849) (0.2) (0.4) ($9,581) ($13,456) ($13,173) ($19,936) Producer s Income Loss ($71,823) ($109,967) (1.0) (1.3) ($71,823) ($82,812) ($71,823) ($92,425) Virus Eradica on $56,167 $78, $30,085 $36,189 $35,214 $46,714 impacted for total industry output are es mated to be maintenance and repair construc on of nonresiden al structures, electric power transmission and distribu on, nondepository credit intermedia on and related ac vi es, commercial and industrial machinery and equipment repair and maintenance, and insurance carriers. For virus eradica on, the top five industries posi vely impacted for total industry output are es mated to be support ac vi es for agriculture and forestry, owner occupied dwellings, wholesale trade, pes cide and other agricultural chemical manufacturing, and limited service restaurants. Layer Hatchery Broiler Industry Sectors The assump ons used to es mate the layer hatchery broiler industry sector economic impacts are: 1) the economic impact is for six months; and 2) the hatcheries have less eggs to sell with sales declining by 10, 15, and 25 percent over six months. Economic ac vity from IMPLAN (2014 data) for the study region s poultry/egg produc on of $221.0 million ($216.7 million in 2017$), was reduced by $22.1 million (10 percent), $33.1 million (15 percent), and $55.2 million (25 percent) to the mul county region because of loss in sales and resul ng in nega ve economic impacts from the decrease in poultry/egg produc on. The LPP is es mated at 31.2 percent. The direct impact for the 10 percent reduc on in sales is es mated to be $3.4 million ($22.1 million 0.5 (six month impact) 31.2 (LPP)). Approximately $8.0 million of input purchases are es mated to be imported into the region for the 10 percent sales reduc on. The es mated economic impacts for an avian flu occurrence for a layer hatchery broiler industry sector based on assump ons presented are in Table 4. Using the 10 percent reduc on scenario as the discussion reference, the es mated direct and total impacts (economic ac vity) are es mated at $3.4 million and $4.0 million, respec vely. Employment impacts are es mated at 12.8 direct and 17.8 for total. Total labor income and value added are es mated at $0.7 million and $1.9 million, respec vely. Table 4. Es mated Six Month Economic Impacts from Avian Flu Occurrence for Layer Hatchery Broiler Industry Sectors for 10, 15, and 25 Percent Loss in Poultry/Egg Produc on for the Study Region. Scenarios Total Industry Output a Employment Labor Income a Total Value Added a Direct Total Direct Total Direct Total Direct Total 10 Percent ($3,385,026) ($4,025,601) (12.8) (17.8) ($490,150) ($667,493) ($1,549,655) ($1,874,709) 15 Percent ($5,077,537) ($6,038,401) (19.3) (26.7) ($735,225) ($1,001,239) ($2,324,483) ($2,812,063) 25 Percent ($8,462,562) ($10,064,002) (32.1) (44.5) ($1,225,376) ($1,668,732) ($3,874,139) ($4,686,772) The total industry output mul pliers for layer hatchery broiler industry sector is Interpreted, for every dollar loss in layer hatchery broiler industry sector, an addi onal es mated $0.19 of economic ac vity was lost throughout the mul county region. The employment mul plier is For every job loss based on the layer hatchery broiler industry sector s decreased expenditures, an addi onal 0.38 jobs are es mated to be lost in other industries throughout the mul county region. The top five industries es mated to be nega vely impacted for total 5

6 industry output are poultry/egg produc on, wholesale trade, owner occupied dwellings, truck transporta on, and veterinary services. Layer Hatchery Broiler Opera on Processor Industry Sectors The assump ons used to es mate the layer hatchery broiler processor industry sector economic impacts are: 1) the economic impact is for six months but the impact would be lagged by two months for the processor; and 2) the processor has to reduce opera ons and sales decline by 10, 15, and 25 percent over eight months. Economic ac vity from IMPLAN (2014 data) for the study region s poultry processing of $711.3 million ($737.3 million in 2017$) was reduced by $71.1 million (10 percent), $106.7 million (15 percent), and $178.0 million (25 percent) because of lost sales and resul ng in nega ve economic impacts from the decrease in poultry processing. The LPP is es mated at 56.8 percent. The direct impact for the 10 percent reduc on in sales are es mated as $27.1 million ($ (8 months 12 months) 56.8). Approximately $21.8 million of input purchases are es mated to be imported into the region. The es mated economic impacts for an avian flu occurrence for a layer hatchery broiler processor industry sector based on assump ons presented are in Table 5. Using the 10 percent reduc on scenario as the discussion reference, the es mated direct and total impacts (economic ac vity) are $28.0 million and $41.1 million, respec vely. Employment impacts are es mated as 90.9 direct and for total. Total labor income and value added are es mated as $7.1 million and $11.1 million, respec vely. Table 5. Es mated Six Month Economic Impacts from Avian Flu Occurrence for Layer Hatchery Broiler Processor Industry Sectors for 10, 15, and 25 Percent Loss in Poultry/Egg Produc on for the Study Region. Scenarios Total Industry Output a Employment Labor Income a Total Value Added a Direct Total Direct Total Direct Total Direct Total 10 Percent ($28,054,458) ($41,102,057) (90.9) (166.9) ($4,185,011) ($7,119,018) ($5,457,306) ($11,133,293) 15 Percent ($42,081,687) ($61,653,087) (136.3) (250.4) ($6,277,516) ($10,678,527) ($8,185,958) ($16,699,939) 25 Percent ($70,136,145) ($102,755,144) (227.2) (417.3) ($10,462,526) ($17,797,545) ($13,643,264) ($27,833,232) The total industry output mul pliers for layer hatchery broiler processor industry sector is Interpreted, for every dollar loss in poultry processing, an addi onal $0.46 of economic ac vity is es mated to be lost throughout the mul county region. The employment mul plier is For every job loss based on the layer hatchery broiler processor industry sector s decreased expenditures, an addi onal es mated 0.84 jobs were lost in other industries throughout the mul county region. The top five industries es mated to be nega vely impacted for total industry output were poultry processing, poultry/egg produc on, truck transporta on, owner occupied dwellings, and wholesale trade. Example Scenario (10 Percent, 15 Percent, and 25 Percent Infec on Rates) While many poultry opera ons have mul ple houses, the opera onal structure used in the analysis consists of two houses. If a farm has six houses, for example, the economic impact es mates would need to be mul plied by three or the number of birds would require adjustment. The layer opera on for this analysis had an inventory of 18,737 birds and the broiler opera on had 88,000 birds. The analysis will assume three scenarios having different levels of impacts, a six month produc on loss, and impacts felt through the supply chain. For poultry processing, the three scenarios assume the industry decreased by 10, 15, and 25 percent resul ng in a decrease from current annual processing of 97.5 million birds. At 10 percent, the decrease in birds processed is es mated as 4.8 million birds, with 7.3 and 12.9 million decrease in birds processed at 15 and 25 percent, respec vely (Table 6). Birds are not available for processing as a result of both layer and broiler opera ons impacted. For the 10, 15, and 25 percent scenarios, an es mated 3, 5, and 8 stylized layer opera ons are projected to be shut down for six months, respec vely, and 18, 28, and 6

7 46 stylized broiler opera ons Table 6. Scenario Parameters Used to Es mate the Economic Impacts in the Example close either because of a shortage of eggs or the disease itself. Item 10 Percent 15 Percent 25 Percent Scenario Even though the capacity of the Birds Slaughtered Reduc on 4,876,332 7,314,497 12,190,829 broiler houses is 88,000 birds, it Stylized Broiler Opera ons Impacted is assumed they are destroyed Stylized Layer Opera ons Impacted and over the next six months two other poten al flocks are not grown in the houses having the disease. Consequently, produc on decrease is es mated to be by 264,000 birds for each stylized produc on facility. The virus eradica on economic impacts assume the broiler houses are impacted by the disease. Per Table 5, the es mated total economic impacts of these three scenarios to the regional economy are $41.1 million, $61.6 million, and $102.7 million for the 10, 15, and 25 percent scenarios, respec vely, or a loss to the economy of an es mated $8.43 per bird. Gross regional product, as measured by value added within the region, is decreased by $11.1 million, $17.0 million, and $27.8 million, respec vely, or an es mated $2.28 per bird. In order to determine the propor on of the es mated economic impacts a ributed by layers and broilers, the number of stylized layer opera ons are mul plied by the economic impacts presented in Tables 2 and 3. For a loss of eight stylized layer opera ons under the 25 percent reduc on scenario, the es mated economic impacts are $0.7 million and $1.0 million for the decrease in egg produc on plus the loss in producers income, respec vely (Table 7). However, income flows into the study region ($6.45 per bird per APHIS) in order to clean and disinfect the houses resul ng in $0.77 million generated in the economy assuming the expenditures required to disinfect the houses occur locally. It is recognized that chemicals, labor, etc. used for this ac vity may be imported from outside the study region. Because of this assump on, net employment in the poultry sector is not projected to be impacted significantly. Under the 25 percent loss scenario, impacts to the layer subsector results in an es mated 17 jobs are lost in total because of the foregone produc on during the six month period and 18 jobs added due to disinfec ng the opera on. Broiler house losses are projected to be more significant. The es mated economic impacts for the loss of six months of pro Table 7. Es mated Six Month Economic Impacts from as a Result of Egg Produc on Losses and Virus Eradica on by Scenario Due to an Avian Flu Occurrence for Layers in the Study Region Scenarios Total Industry Output a Employment Direct Total Direct Total Total Net Impact 10 Percent ( $241,708) ( $390,314) Produc on Loss (-$190,182) (-$280,279) (-1.3) (-2.0) Producer s Income Loss (-$272,874) (-$417,790) (-3.3) (-4.6) Virus Eradica on $221,348 $307, Total Net Impact 15 Percent ( $362,563) ( $585,471) Produc on Loss (-$285,273) (-$420,418) (-2.0) (-3.0) Producer s Income Loss (-$409,311) (-$626,685) (-5.0) (-6.9) Virus Eradica on $332,021 $461, Total Net Impact 25 Percent ( $604,271) ( $975,785) Produc on Loss (-$475,456) (-$700,697) (-3.3) (-5.0) Producer s Income Loss (-$682,184) (-$1,044,475) (-8.3) (-11.6) Virus Eradica on $553,369 $769,

8 duc on for the 25 percent reduc on scenario is es mated to decrease the study region s economy $2.1 million, a $5.1 million income loss, and a gain of $3.6 million to disinfect the broiler houses (Table 8). The es mated economic impacts for 10 and 15 percent reduc on to the broiler industry are also reported in Tables 7 and 8. Table 8. Es mated Six Month Economic Impacts from as a Result of Broiler Produc on Losses and Virus Eradica on by Scenario Due to an Avian Flu Occurrence in the Study Region Scenarios Total Industry Output a Employment Direct Total Direct Total Total Net Impact 10 Percent ( $864,311) ( $1,417,147) Produc on Loss (-$575,130) (-$828,404) (-3.7) (-7.4) Producer s Income Loss (-$1,326,639) (-$2,031,195) (-18.5) (-24.0) Virus Eradica on $1,037,458 $1,442, Total Net Impact 15 Percent ( $1,296,467) ( $2,125,721) Produc on Loss (-$862,695) (-$1,242,606) (-5.5) (-11.1) Producer s Income Loss (-$1,989,959) (-$3,046,793) (-27.7) (-36.0) Virus Eradica on $1,556,187 $2,163, Total Net Impact 25 Percent ( $2,160,778) ( $3,542,867) Produc on Loss (-$1,437,825) (-$2,071,009) (-9.2) (-18.5) Producer s Income Loss (-$3,316,598) (-$5,077,988) (-46.2) (-60.0) Virus Eradica on $2,593,645 $3,606, Limita ons It is important to note that this type of study has limita ons and risks. First, the results represent a single snap shot in me. Second, many of the cost es mates used come from a variety of sources and are subject to change as the poultry industry expands or contracts and as more accurate informa on becomes available. Third, the total net effects of the economic impacts are difficult to capture and may be over or under stated. Fourth, the scenario results are specific to the assump ons stated. Devia on from the underlying assump ons would result in changes to the economic impacts es mated. Plus, the scenarios are based upon specified what if percentages of the flock being affected and do not specifically represent the epidemiology of the recent avian flu occurrence in the state. Fi h, the es mated economic impacts do not take into account spillover effects that could occur outside the study region (i.e., the state of Tennessee) or to neighboring states. Finally, a low level of avian flu infec on results in nega ve economic impacts and loss of jobs in a produc on area. Responses to such outbreaks need to address both the direct farm impacts, as well as the local community impacts, to include issues such as educa on and job loss assistance. References IMPLAN Group LLC, IMPLAN System (2014 data and V.3 so ware), Northcross Dr., Suite 120, Huntersville, NC Available at h p:// North Carolina State Agricultural & Resource Economics. Enterprise Budget for Contract Growers (With Cool Cells), Hatching Eggs. Available at h ps://ag econ.ncsu.edu/extension/budgets/poultry/. Rhodes, J., J. Timmons, R. No ngham, and W. Musser "Broiler Produc on Management for Poten al and Exis ng Growers." University of Maryland Extension. Available at h p://extension.umd.edu/ sites/ extension.umd.edu/files/_docs/poultry_broilerproduc onmanagement_final1.pdf. 8

9 U.S. States Department of Agriculture, Animal and Plant Health Inspec on Service (APHIS) HPAI Virus Elimina on: Flat Rate Payments. Avian Influenza Disease. Available at h ps:// animalhealth/animal disease informa on/avian influenza disease/ct_avian_influenza_disease. U.S. Department of Agriculture, Economic Research Service Data Files: U.S. and State Level Farm Income and Wealth Sta s cs. Available at h ps:// products/farm income and wealth sta s cs/ data files us and state level farm income and wealth sta s cs/ U.S. Department of Agriculture, Na onal Agricultural Sta s cal Service Tennessee State and County Data Census of Agriculture Report. Volume 1, Geographic Area Series, Part 42. Available at Available at h p:// ons/2012/full_report/volume_1,_chapter_2_county_level/ Tennessee/tnv1.pdf. U.S. Department of Agriculture, Na onal Agricultural Sta s cal Service Poultry Slaughter 2016 Summary. Available at h p://usda.mannlib.cornell.edu/usda/current/poulslausu/poulslausu pdf. AIM AG/AGRI Industry Modeling & Analysis Group: (Dr. Burton English, Dr. Kim Jensen, and Mr. Jamey Menard, Department of Agricultural & Resource Economics), and Dr. Andrew Griffith, Dr. Aaron Smith, and Dr. David Hughes, Extension, Department of Agricultural & Resource Economics, The University of Tennessee Ins tute of Agriculture. For more informa on concerning AIM AG, please contact the group at or visit the web page at h p://aimga.ag.utk.edu/. Data generated for the report from IMPLAN 2014 data (values reported in 2017$ unless indicated otherwise). Analysis conducted in April