By Susan Edmunds of RNZ
Bird flu will be a tough blow to affected farmers and potentially their region, but so far does not look to be a significant threat to the wider New Zealand economy.
As many as 80,000 chickens will be killed after an avian influenza outbreak of the highly pathogenic H7N6 strain was detected at a Hillgrove egg farm near Moeraki in North Otago, the first such case to be reported in the country.
Infometrics principal economist Brad Olsen said the number of chickens to be culled and the halting of exports was challenging, but the sector was not a key driver of New Zealand exports.
"The fact we've had this strain come through is undoubtedly bad news, but it could have been worse. It's not the prevalent strain (H5N1) everyone is worried about more widely, globally.
"But at a time when we had been hoping to see better outcomes generally across the primary sector, these challenges do put us on a bit more of the back foot."
Olsen said the fact it was identified and addressed quickly with a plan to eradicate it should increase confidence in New Zealand exports.
"I would hope people would look at what we are doing and see we are making a pretty reasonable and comprehensive effort going forward."
New Zealand's biosecurity and food safety systems were highly regarded, he said.
"I don't think this bird flu outbreak should change that, it is limited at this stage."
The poultry flock numbered more than 25 million, so the current number being culled was about 0.3%, he said.
"It's not huge but what we also highlighted last year when was had the big concern about egg production and how eggs skyrocketed in price… It might not be a big national trend but there is the potential for it to have a slightly more localized or regional economic trend… there's the potential for more direct economic concern in the likes of Otago."
University of Otago department of marketing lecturer Dr Damien Mather said the news of avian flu being detected at a poultry farm in Moeraki was obviously concerning, but most of the country’s trading partners would not be worried yet.
"Where we have good trading relationships anyway, they generally trust our ability to deal with these things, and they generally don't knee-jerk react, and if they do react, it's generally for very short periods of time, while they check that we're doing the things they expect us to do.
"These threats have been proactively tracked; we knew they were on the horizon."
Dr Mather said Donald Trump’s election win in the United States meant their response to the detected outbreak was an "unknown quantity" but ordinarily New Zealand had a very good relationship with the US.
"It will depend on a case-by-case basis, and if the US is looking for any excuse not to import somebody else's products, then they could very stop importing our eggs and poultry
"Trump doesn't have to get re-elected, so he probably doesn't care what promises he keeps or doesn't keep anyway."
Dr Mather said New Zealand had a very good reputation overseas for dealing with pandemics and biosecurity hazards, and he expected this to continue in its attempts to curb the spread of avian flu.
"We’ve beaten these bastards before, and we'll beat them again."
ASB chief economist Nick Tuffley agreed the number of birds that had to be culled was still small.
"The issue is the containment and the ability to keep it from spreading. If it starts to spread that's where the impact can be a bit larger."
The M. bovis eradication was a fairly substantial programme in a larger industry that did not have a clear impact on national economic figures, he said.
"Although it undoubtedly would have had some impact on the availability of New Zealand meat at that time. In the chicken and egg market, which is ultimately what we are talking about, it is a lot more domestic focused than hitting export earnings or potentially impacting on our reputation as a food exporter as well.
"Any sort of flow-on impact from that should be relatively light. I think the key thing is at this stage it's too early to tell. If it gets contained very quickly, there's very limited impact at all."
- Additional reporting ODT
