Will egg prices go up amid more bird flu outbreaks?
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Will egg prices go up amid more bird flu outbreaks?
The Centers for Disease Control and Prevention released a health alert at the beginning of April informing the public that a Texas farm worker tested positive for highly pathogenic avian influenza, or HPAI.
Just before the announcement, Cal-Maine Foods, the largest producer of fresh shell eggs in the country, announced that chickens at one of its facilities in Texas tested positive for HPAI, leading it to cull 1.6 million laying hens and 337,000 young hens, amounting to 3.6% of its total flock.
The company said it is “working to secure production from other facilities to minimize disruption to its customers.” Meanwhile, the virus has been found in Texas dairy herds.
If outbreaks continue, we may quickly see egg prices rise, said Lee Schulz, an associate professor of economics at Iowa State University. But he said retailers can draw from an existing egg supply, which may mitigate potential price increases in the short run.
“Typically, 86-87.5% of the eggs produced within a month are consumed, and 12.5-14% of the eggs are hatched to add birds to the flock,” Schulz explained over email. “For a short period of time, the industry could maintain supplies to consumers by retaining fewer eggs.”
In January 2023, the price of a dozen grade A eggs peaked at more than $4.80 after the bird flu infected tens of millions of hens, data from the Bureau of Labor Statistics’ consumer price index shows. That’s more than twice the amount they cost during the same period the previous year.
Higher inflationary costs like labor, transportation and energy could also influence prices, which is why it may be difficult to “parse out the impact” of HPAI on egg prices, Schulz added.
That is exactly what economists at the University of Arkansas tried to do. In a 2023 paper, the economists untangled other factors that may have pushed up egg prices during the 2022 outbreak, like inflation. They found the avian flu resulted in a 7.2% to 9.2% increase in retail egg prices between February 2022 and June 2023.
“This is not our first rodeo with the bird flu,” said Trey Malone, one of the paper’s co-authors and an assistant professor of agricultural economics at the university. “It seems to be an increasingly recurrent event.”
The Arkansas economists used egg price data from the Agriculture Department’s marketing arm, which included a breakdown of regional prices. Among the economists’ other findings: The 2022 outbreak caused U.S. consumers to spend between $930 million and almost $1.2 billion more than they would have if the bird flu had not been present.
But if the average flock size becomes larger, it may be difficult to extrapolate that data for future outbreaks, the paper noted.
As for dairy prices, Schulz of Iowa State University said the avian flu hasn’t had an effect on milk supply or prices.
“The U.S. typically has sufficient milk supply in the spring months, just due to seasonally higher production,” Schulz said.
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