Not long after Inghams (ASX:ING) shares got slammed by reports of bird flu in Australia – despite that company proclaiming it hadn’t been affected – another stock hasn’t been so lucky.
While shares are flat in the highly illiquid Farm Pride Foods (ASX:FRM), the company has today revealed it has to kill off 8% of chooks it owns.
Last night, the egg company got test results back conducted at its Lethbridge Aviary finding free range hens tested positive for the avian influenza H7N3 strain.
“The total hens at the Lethbridge Aviary site comprise approximately 80,000 free range hens [representing] approximately 8% of Farm’s Pride’s total production capacity,” the company wrote on Tuesday.
“The hens at the Lethbridge Rocks site tested negative for AI on 1 June and 2 June 2024.
“This site is currently being treated as separate to the Lethbridge Aviary site and will continue to be monitored in conjunction with VicAg.”
The company is now progressing applications for compensation from the Emergency Animal Disease Compensation Scheme, available under the Victorian government. (Read: it has to cull them all.)
That same strain found by Farm Pride was the one first detected around two weeks ago in Meredith, Victoria. The virus was first detected there on the 22nd of May. Two days later, a poultry farm in Terang was also found to have chicken with the illness.
Terang is 130km away from Meredith to the southwest, indicating spread associated with logistics. Meredith and Lethbridge are far closer together – a 15km drive southward on Victoria’s A300 Midland Hwy.
Canberra’s animal and plant pests and diseases division was quick to point out regarding the initial outbreak at Meredith that the H7N3 strain is different from the H5 strain currently “causing concern globally.”
The Victorian government has quickly set up control areas and is advising all farmers they are obliged to report birds showing symptoms. Victoria has also imposed transport restrictions on affected farms.
Looking at the three sites so far: Meredith, Terang, and Lethbridge – it’s clear that spread is being enabled by transport movements between each site.
The more potent H5 strain is currently rampant in parts of America, where it has spread to cattle – and more alarmingly, human workers.
Luckily, we haven’t got that here in Australia. The University of NSW in late May also wrote that the likely cause of the H7N3 strain currently impacting Farm Pride Foods came from wild birds which interacted with chickens under the company’s ownership. This strain poses less risk to human health.
But the news was enough to see the market sell off Inghams, even when the giant told the market its shareholders had nothing to worry about. It appears the only thing keeping FRM shares flat is that the company is rarely traded as is.