Deadly avian flu sends egg prices soaring

On Thursday, retailers paid between $2.80 and $2.89 for a dozen grade A large white eggs in the Midwest, according to the USDA Midwest Regional Daily Egg Report. That is more than double the approximately $1.25 they cost in March, according to data compiled by Brian Earnest, principal protein industry analyst for Cobank, which provides financial services to agribusiness.

Large white eggs in that region typically cost between $0.70 and $1.10 a dozen, Earnest said, noting Midwestern prices serve as a national benchmark. Around Easter, when demand is high, those prices can reach around $2, he said, much lower than Thursday.

Higher feed costs and supply chain difficulties have made many foods more expensive this year, and eggs are no exception. But this particular increase is being driven by highly pathogenic avian influenza that has been detected in flocks across the country, Earnest noted. It is the worst outbreak of bird flu in the United States since 2015.
Although the flu is deadly to poultry, it is “primarily an animal health problem,” according to the Centers for Disease Control, which added that they believe “the health risk to the general public from current H5N1 bird flu is low.

Why is the flu so contagious and deadly? For birds, USDA protocol is to kill infected flocks to slow the spread of disease.

In Iowa, the nation’s top egg producer, “we currently have more than a dozen sites affected by the disease,” including three facilities where hens lay eggs, said Chloe Carson, director of communications for the Iowa Department of Agriculture. As a result, “we’ve had to depopulate 11.2 million laying hens,” out of about 56 million laying hens in Iowa overall, he said.

This particular strain of flu is being spread by wild migratory birds, Carson explained. Migration season typically lasts from March to May, she noted.

“As long as migration patterns continue, there is a risk that diseases will continue to be introduced into our domestic populations,” Carson said.

More expensive eggs this summer

Although Although wholesale egg prices are rising, that doesn’t mean supermarkets are passing those costs on to consumers, Earnest explained.

Retailers will often “take a loss on eggs to drive store traffic,” he said. Generally, around Easter or Christmas, when people are most likely to be baking, “we’ll see a reduced price on the egg shelves.”

So instead of raising prices, some stores seem deal with higher costs by removing their egg promotions.

“Retail promotional activity was very limited and offered little incentive for buyers to buy beyond immediate needs,” according to the USDA’s Weekly Egg Market Summary, released last Friday.

Eventually, though, prices are likely to go up.

“I expect we will see a premium of at least 30 or 40 percent on top of [typical prices] during the summer months of this year as a result of tight supply,” Earnest said.

He also noted that even before the flu was detected in the US earlier this year, the number of laying hens was relatively low. And inventories of frozen or dried eggs are “significantly lower than they usually are,” she said. That could mean there will be a shortage of eggs later this year.

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