One Mutation Away from a Human Pandemic

Avian influenza, commonly known as bird flu, is one mutation away from being able to spread between humans, according to virologists. This alarming reality underscores the urgent need for preparedness and vigilance.

Recent Outbreaks and Their Impact

Over the past year, bird flu has infected millions of laying hens, thousands of dairy cows, and dozens of people across the nation. To date, all human cases have involved direct contact with infected animals, with no evidence of person-to-person transmission. However, the potential for the virus to evolve and spread easily between people poses a significant risk to the global economy and food system, similar to the impact of COVID-19.

What’s New with This Flu?

Highly Pathogenic Avian Influenza, known as H5N1, first identified in domestic birds in 1996, has become increasingly prevalent among wild and domestic birds worldwide. A large-scale infection in commercial poultry flocks was recorded in Europe between 2021 and 2022.

In the spring of 2024, bird flu was detected in dairy cows for the first time. Within weeks, the first case of a person contracting bird flu from a cow was reported. Since then, the virus has spread virtually unchecked through dairy cow populations across the United States, infecting over 950 dairy herds across 16 states.

Cases of humans being infected with bird flu from interactions with sick birds have also been reported in the US, Canada, and the UK in recent months, raising concerns about potential mutations. The spread of bird flu to humans through dairy cows, with nearly 70 confirmed cases, is believed to be far more widespread than reported. Farm workers often lack protections such as sick pay and leave, and many are undocumented, creating a strong disincentive to report their illness and isolate themselves.

These incidents are concerning and are not emerging in a vacuum. Stressful and overcrowded conditions in industrial farming can increase the risk of disease outbreaks. To prevent the spread of illness, antibiotics are used extensively, contributing to the development and spread of antimicrobial resistance. Climate change, with its temperature fluctuations and droughts, further increases the likelihood of bird flu outbreaks in genetically similar and stressed animals.

Infecting Business

The current bird flu outbreak has varied and complex implications for consumers, businesses, and investors, ranging from supply chain disruptions to potential product recalls.

Since October 2021, H5N1 has killed more than 300 million birds worldwide through a combination of flu-related deaths and culling, affecting the livelihood of millions of people. The US Department of Agriculture has pumped more than $1.7 billion into combatting bird flu on poultry farms since 2022, including reimbursing farmers that have had to cull their flocks.

Compensating farmers for livestock losses may not be feasible for governments in low- and middle-income countries, and even in wealthier nations, it is a financial strain on public coffers. Additionally, such payments do not eliminate other materially relevant consequences of bird flu outbreaks and culling that can impact companies and investor portfolios.

Bird flu in poultry has tightened egg supplies and increased prices significantly, a trend the USDA expects to continue, with potential for supply chain disruptions and increased operating costs for farmers, retailers, and restaurant chains, and other food manufacturers that rely on eggs. Denny’s and Waffle House are among the first US restaurant chains to introduce a surcharge on eggs, while many supermarkets are limiting consumer purchases to prevent stockpiling.

Lessons from COVID-19

The multiple effects of the COVID-19 pandemic on the health of people, companies, and economies were estimated to have cost the US some $14 trillion, making it crucial that all stakeholders get ahead of the current bird flu outbreak to avoid a similar crisis.

Understanding the links between bird flu, intensive animal agriculture, and the associated material risks, and engaging with holdings to mitigate these, is crucial for investors seeking to protect their investment portfolios.

As seen in the Coller Fairr Protein Producer Index and in FAIRR’s Industry Reinfected report, improving the welfare and hygiene conditions of livestock, reducing flock numbers and the stocking density of facilities, and reducing the distance animals travel from breeding to slaughter could all help reduce the risk of further outbreaks. Building more resilient supply chains and improving food security could help prevent the current outbreak from mutating into a fully-fledged pandemic, some of which may also present investment opportunities.

For example, plant-based protein company Burcon NutraScience Corporation highlighted the recent egg supply disruption caused by bird flu when it launched an alternative egg protein last year. Food technology start-up Eat Just, which has attracted funding from investors such as the Qatari sovereign wealth fund and private equity manager Charlesbank Capital Partners, found that sales this January jumped by five times from the same period a year earlier. This success points to the potential of egg substitutes in helping to build a more resilient, safer, and more sustainable food system. Life sciences company Labcorp also announced in its full-year financial results that it has developed a test to help diagnose H5 bird flu in humans.

Investing in Resilience

The ongoing and evolving bird flu crisis underscores the growing risks that animal-borne diseases pose to global markets, supply chains, and public health.

Investors need to pay close attention to how the outbreak continues to unfold, as disruptions across the agri-food sector can impact operating costs and earnings. Warnings from global experts that another pandemic could be triggered should not be underestimated.

Asset owners and investment managers that prioritize risk mitigation and sustainability—whether through engagement with protein producers and retailers or diversification into emerging health and food technology investments—may be better positioned to navigate future shocks.

Counterarguments and Criticisms

Some critics argue that the current measures and warnings are overblown and that the risk of bird flu becoming a human pandemic is low. However, the rapid spread of the virus among dairy cows and the increasing number of human infections suggest otherwise. The potential for a mutation that allows the virus to spread easily between humans is a real and present danger.

Others point to the economic impact of culling and the financial strain on farmers and governments. While these are valid concerns, the long-term benefits of preventing a pandemic far outweigh the short-term costs. Investing in resilience and preparedness now can save lives and protect the economy in the future.

Conclusion

The bird flu outbreak is a stark reminder of the interconnectedness of our world and the need for vigilance and preparedness. By understanding the risks and taking proactive measures, we can mitigate the impact of this and future outbreaks. Investors, policymakers, and the public must work together to build a more resilient and sustainable food system.

Q: What is avian influenza, and why is it a concern?

Avian influenza, commonly known as bird flu, refers to a group of RNA viruses that naturally occur in wild aquatic birds and can infect domestic poultry. The strain highly pathogenic avian influenza (H5N1) is notably concerning as virologists warn it is indeed “one mutation away” from spreading between humans. This potentiality underscores the urgent need for preparedness and vigilance.

Q: how has bird flu impacted agriculture and public health recently?

Over recent years, bird flu has significantly impacted agriculture by infecting millions of laying hens and thousands of dairy cows. There have also been human cases when people came into direct contact with infected animals. While there’s currently no evidence for person-to-person transmission, the virus’s evolution to facilitate such a change could have far-reaching impacts, similar to those observed during the COVID-19 pandemic.

Recent outbreaks have seen bird flu detected in dairy cows, leading to tens of cases where humans contracted the virus from cows. the spread through dairy populations across the United states highlights the virus’s growing threat. This growth raises concerns about potential mutations that could enhance its transmissibility among humans [1].

Q: What role does industrial farming play in the spread of bird flu?

Industrial farming practices, including stressful and overcrowded conditions, contribute to the higher risk of disease outbreaks. In efforts to prevent the spread, extensive use of antibiotics is common, which can contribute to antimicrobial resistance. Additionally, climate change exacerbates these conditions, increasing the likelihood of outbreaks among genetically similar and stressed animals in farms.

Q: What are the economic implications of the bird flu outbreak?

The economic implications are far-reaching, affecting supply chains and industries dependent on poultry, particularly the egg market. since October 2021,H5N1 has led to the death of over 300 million birds worldwide due to culling,impacting the livelihood of many people. Governments have invested significant resources, with the US Department of Agriculture alone spending over $1.7 billion to combat the outbreak, including compensating farmers for livestock losses [2].

Egg prices have surged, a trend expected to continue, with potential supply chain disruptions affecting feed producers, farmers, retailers, and restaurants. Some chains, including Denny’s and Waffle House, have introduced egg surcharges, while supermarkets limit purchases to curb stockpiling.

Q: How can the lessons from COVID-19 help combat bird flu?

The COVID-19 pandemic, which cost the US approximately $14 trillion, serves as a poignant reminder of the economic and public health devastation potential pandemics can cause. Stakeholders can learn by improving livestock welfare, reducing stocking density, and shortening distances between breeding and slaughter, which might reduce the risk of future outbreaks. These strategies could also provide investment opportunities in resilient supply chains and alternate food technologies, like plant-based proteins and egg substitutes, strengthening food security [3] [4].

Q: What steps can investors take to mitigate risks related to animal-borne diseases?

Considering the evolving bird flu crisis, investors shoudl consider the significant risks animal-borne diseases pose to global markets and supply chains. By focusing on resilience and sustainability, including engagement with agri-food companies and investing in emerging health and food technology sectors, investors can better navigate these disruptions.

Q: What are the criticisms regarding the current response to bird flu, and how can they be addressed?

Critics argue that heightened measures and warnings overcurrent bird flu might be exaggerated, suggesting a low risk of the virus causing a human pandemic. However, incidents like the rapid spread in dairy cows and increased human infections indicate a tangible danger, emphasizing the real threat of mutation enabling human-to-human transmission.

While concerns about the economic strain from culling are valid, investing in preparedness and preventive measures now is crucial for long-term economic stability and public health safety.

Conclusion

The bird flu outbreak serves as a critical reminder of our interconnected world and the importance of vigilance and preparedness. By assessing risks and implementing proactive measures,it’s possible to mitigate the impact of bird flu and other potential outbreaks. Collaboration among investors, policymakers, and the public is essential to building a more resilient and sustainable global food system.