The sharp uptick in California egg prices is not likely to be replicated in milk prices due to the nature of dairy markets, according to a study by researchers at the University of California, Davis. The result will likely be a major net loss for dairy farms across the state.
Since California dairies primarily produce milk for storable dairy products to be exported, such as cheese and butter, the researchers found that any declines in California milk production will likely not change market prices where competitors can fill in.
They said since bird flu infection means additional expense associated with herd health including early culling, calf abortions and labor monitoring, dairies experience heavily higher costs following infection – similar to poultry farmers that are forced to depopulate flocks.
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But California poultry farmers largely rely on the intrastate market – Californians consume roughly 40% of U.S. cage-free eggs – given the state's stringent animal welfare requirements.
The researchers acknowledge that the novelty of H5N1 in dairy herds leaves many research questions untested, but preliminary data shows affected herd milk production down 20% for the first two weeks of infection before gradual recovery begins.
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