As avian influenza (bird flu) continues to spread globally, Australian poultry farmers must remain vigilant and proactive in managing this serious risk.
Given the potential for significant economic impact, the need for comprehensive risk management, including biosecurity practices and appropriate insurance protection, is crucial.
Farmers should actively monitor local and regional outbreaks and stay up to date with industry-specific risk mitigation standards.
The increasing threat of bird flu
Bird flu is a highly contagious virus and outbreaks can lead to significant losses for not only poultry producers, but also the wider supply chain, from farms to the retail sector.
The virus is classified as either high pathogenic (HPAI) or low pathogenic (LPAI). HPAI strains can cause severe illness and death, while LPAI strains may show minimal or no symptoms in poultry but can mutate into more virulent forms.
Infected birds shed the virus through their saliva, nasal secretions, and faeces, and susceptible birds can contract the disease through contact with contaminated surfaces or infected wild birds.
Wild birds are natural reservoirs for the virus and are a significant factor in its spread. In Australia, migratory bird patterns and proximity to wetland areas can increase the risk of exposure to poultry farms.
Key risk factors for bird flu in Australia
Several factors heighten the risk of bird flu outbreaks on Australian farms:
Proximity to wild bird habitats
Farms located near wetlands, lakes, and migratory bird pathways are at a higher risk of bird flu exposure.
Biosecurity lapses
Sub-standard farm hygiene and poor enforcement of biosecurity measures increase the likelihood of disease spread. Australian farms must rigorously enforce hygiene protocols to minimise risk.
Climate change
Altered migratory patterns (due to climate change?) may expose Australian farms to new strains of the virus via exposure to migratory birds we haven’t seen before, which further heightens the need for surveillance and preparedness.
Supply chain disruptions
Delays in culling, testing, and restocking can lead to prolonged recovery periods for affected farms. These disruptions may also lead to a slowdown in food production and trade.
Financial and reputational impacts of an outbreak
The direct financial impact of a significant bird flu outbreak in Australia could be substantial. Farmers may face costs related to culling infected flocks, lost revenue from eggs and meat production, and possible trade restrictions.
Additionally, there could be long-term reputational damage, especially for Australian exporters, due to perceptions of poor disease control, which creates opportunities for our trading competitors.
Heightened regulatory scrutiny during an outbreak can also lead to operational bottlenecks and supply chain disruptions, which can also affect the bottom line.
Following an outbreak Farmers may also experience increased insurance challenges, with reduced capacity and higher premiums, as insurers adjust to the higher risk profile. The exposure to claims arising from business interruption and livestock mortality also increases, particularly during widespread outbreaks.
Mitigating bird flu risk in the Australian poultry industry
To effectively mitigate the risk of bird flu, Australian poultry farmers should adopt a comprehensive strategy combining prevention, preparation, and response.
Five key risk management strategies include
1. Enhanced biosecurity practices
Implement stringent biosecurity measures including disinfecting vehicles, restricting access to poultry sheds, and providing personal protective equipment (PPE) for workers and visitors.
2. Wildlife management
Limiting exposure to wild birds through the installation of nets, covered feeding areas, and other deterrents
3. Ongoing monitoring and surveillance
Early detection is critical. Regular testing, reporting, and collaboration with local, state, and federal authorities ensure farmers receive timely alerts about potential outbreaks.
4. Insurance and financial protection
Consider insurance coverage (if available) including business interruption and livestock mortality policies, can help provide a financial buffer in the event of an outbreak.
5. Contingency planning
Farms should establish detailed outbreak response plans, including protocols for rapid culling, disposal of infected birds, and the resumption of operations.
Important considerations for bird flu insurance in Australia:
In the event of a bird flu outbreak, Australian poultry farmers can seek to access government compensation for the direct costs of culling infected birds, as well as for clean-up expenses.
However, this compensation does not typically cover losses related to business interruption.
Insurance, when available, can include coverage for livestock mortality, culling costs, and business disruption. Cover, is, however, limited and not always available in all regions, due to the severity of losses following outbreaks and restricted number of underwriters who provide capacity in the sector.
Limited availability of coverage
Given the fact that cover becomes severely restricted once an outbreak occurs, farmers/growers should consider securing insurance beforehand.
Sub-limits on coverage
Insurance providers will often seek to limit coverage amounts, especially in high-risk regions.
Policy language is often confusing, so policyholders should understand the specific terms and conditions of their policies, so there is no ambiguity in the event of a claim.
Insurance underwriting requirements
Insurers will typically require information about the number of birds on-site, the farm's proximity to other poultry operations, and evidence of biosecurity practices.
Strong biosecurity measures can improve the chances of securing adequate coverage at competitive rates.
Timely action
As bird flu can spread rapidly, securing insurance coverage ahead of an outbreak provides the best protection.
Farmers in areas with known or imminent outbreaks should consult with insurers to review and potentially enhance their coverage.
Conclusion
The risk of bird flu outbreaks in Australia is real, and the consequences for the poultry sector, including egg production can be severe.
A proactive approach to biosecurity, risk assessment, and adequate insurance coverage can significantly reduce the impact of an outbreak.
Australian poultry farmers should work closely with insurers, biosecurity experts, and government bodies to implement effective prevention, response, and recovery strategies. By doing so, they can enhance resilience and better manage the financial risks posed by avian influenza.
Poultry farmers should speak to our experts for assistance in understanding the availability of insurance coverage or how to implement relevant risk mitigation strategies.
The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. The contents of this publication are not intended as a legal commentary or advice and should not be relied on in that way. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. © 2025 Lockton Companies Australia Pty Ltd.