Egg prices soar as the deadliest bird flu outbreak on record devastates poultry flocks across the country.
The price of eggs rose 11.1% mom last month and nearly 60% year-on-year in December, according to Thursday’s consumer price index, a measure of what consumers are paying for goods and services. Headline inflation fell to 6.5% according to federal data this week.
Here’s what you should know.
What are egg prices now?
Egg prices have fallen slightly from last month’s record highs, but staples remain more expensive than usual and continue to weigh on consumer budgets.
According to Information Resources Inc., the price of eggs rose more than any other food item in 2022. Wholesale prices for large Midwestern eggs fell to $4.18 a dozen this week from a peak of $5.46 a dozen in December, according to research firm Urner Barry. As of mid-January 2022, wholesale prices for large Midwest eggs were $1.30 per dozen.
Some retailers say egg prices typically fall after December as demand cools after a spike caused by holiday baking and cooking.
At Piggly Wiggly stores in Alabama and Georgia, egg prices fell about 50 cents a dozen to $6.43 this week, the first drop in months, said Keith Milligan, the company’s controller. Prices are likely to stay at current levels until falling further in February or March, he said, when suppliers expect new flocks of laying hens will contribute to more supply.
“Retailers will be reluctant to bring prices back to ‘normal’ levels for some time,” said Brian Earnest, animal protein economist at agricultural lender CoBank.
Why are egg prices so high?
Since early 2022, highly pathogenic avian influenza has killed about 58 million birds. According to the US Department of Agriculture, it is the deadliest outbreak on record and the worst since 2015, when 50 million birds were killed.
According to the USDA, US egg stocks in the last week of December 2022 were 29% lower than at the start of 2022. By the end of December, more than 43 million laying hens had died as a result of the disease.
“Lower than usual stocks of shell eggs towards the end of the year, combined with increased demand due to the holiday baking season, led to several consecutive weeks of record-high egg prices,” USDA economists said in a January research note.
Egg prices have also risen amid general food inflation caused by rising labor, ingredient and logistics costs. Higher feed and transport costs for producers mean buyers will continue to face elevated egg prices even after the impact of bird flu abates, said CoBank’s Mr Earnest.
Why is this bird flu outbreak so deadly?
Agricultural industry officials and analysts have attributed the rapid spread of the virus to wild birds carrying it on their way to farms. To limit the spread of the virus, entire flocks of poultry are killed after infection is confirmed.
While the 2015 outbreak ended in June this year, cases in 2022 continued to emerge throughout the fall and winter in various parts of the country.
Poultry processors invested in new biosecurity measures and other precautions to reduce farm-to-farm spread. However, spreading the virus can be so easy that a worker will step on the faeces of wild birds and forget to clean their boots before entering a commercial stall – resulting in the death of an entire flock.
Is there an egg shortage?
There was a spot shortage of eggs, but not a widespread one. The American Egg Board, which represents egg producers, has said shortages are rare. Farms are recovering faster than in 2015, according to the Egg Board, recovering from an outbreak in about three months. It took farms six to nine months to recover from the previous outbreak.
Kroger Co. KR -0.99%, the country’s largest supermarket chain, said its supply of eggs remained adequate, while some regional chains said they were dealing with intermittent shortages.
Organic eggs and other specialty eggs, which are sold to retailers and distributors at a fixed price, have been cheaper than conventional varieties in some cases in recent months. Organic eggs have in some cases been harder to find as retailers try to stock more of them.
What are supermarkets and food companies doing about the egg situation?
With eggs a staple for US consumers, grocers are trying to keep prices competitive. In fact, some retailers said they sacrificed some profits on eggs for months to keep on-shelf prices as low as possible.
There aren’t many substitutes for eggs. Supermarket operators have announced that they will secure more plant-based egg alternatives or special varieties such as organic eggs.
The largest US egg producer, Cal-Maine Foods Inc., CALM -1.17% over the last month, said the bird flu outbreak will keep the overall supply of eggs short until the national chicken flock is replenished.
What other products are affected?
Turkey supply is also tight, with bird flu resulting in the deaths of about 10 million commercial turkeys, according to the USDA. Turkey breast meat prices soared to over $6.50 a pound in the spring of 2022, an all-time high, and have remained at elevated levels since then, according to federal data.
Executives at Hormel Foods Corp., the second-largest turkey processor by volume behind Butterball LLC, said in an earnings call in November that lower turkey production is expected through at least the first half of 2023.
“Breast meat prices remain at historically high levels and have yet to come down,” Hormel’s chief financial officer Jacinth Smiley said in November.
Write to Patrick Thomas at [email protected] and Jaewon Kang at [email protected]
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