URBANA, Ill. — The United States is currently on the tail end of the worst bird flu outbreak in history, with 222 confirmed cases (as of June 15) and more than 47 million birds affected across 15 states (according to the USDA Animal and Plant Health Inspection Service).

The USDA expects the outbreak to plateau near 50 million birds later this summer. The 2014-15 outbreak exceeds the previous 1983 record by more than 30 million birds and has led to disruptions in the supply of eggs, localized interruptions in turkey production and legitimate concerns over potential exposure to the bird flu in the broiler population this fall (farmdoc Daily of May 8, and June 5).

University of Illinois economists John Newton and Todd Kuethe provide the following analysis. With respect to feed use of corn, conservative estimates of "one bushel per bird" imply the bird flu could result in feed and residual use of corn being 50 million bushels fewer than projected for the current marketing year. From current projections, a feed consumption level greater than one bushel per bird, combined with a slow rate of flock repopulation, could support a 100 million-bushel decline in feed use.

Absent increased consumption in other categories, such a decline would push the corn carryout closer to the 2 billion-bushel threshold and would continue to pressure old-crop corn prices ("Weekly Outlook," April 13). This analysis provides some perspective on how the bird flu may affect projections for feed and residual use of corn during the 2014-15 marketing year.

For the current marketing year, USDA’s World Supply and Demand Estimates (WASDE) projections of feed and residual use of corn have ranged from a low of 5.25 billion bushels to a high of 5.375 billion. Most recently, following the March 30 Grain Stocks report, which indicated higher-than-anticipated quarterly corn stocks, USDA reduced projections for feed and residual use of corn to 5.25 billion bushels. This number has remained unchanged through the June 10 WASDE projections despite the pace of bird flu confirmations accelerating in April and May 2015 (farmdoc Daily of June 5). Put simply, USDA has not revised feed and residual use of corn lower as a result of the bird flu. There are several reasons why this may be the case.

First, the decline in feed use attributable to the bird flu is not expected to significantly alter total poultry consumption of corn. USDA Economic Research Service (ERS) Feed Grains Yearbook indicates for the 2014/15 marketing year, poultry is estimated to represent 34 percent of grain-consuming animal units.

Given the ERS projection for 5.25 billion bushels of corn used for feed, poultry use is expected to total 1.8 billion.