Bird flu makes eggs more expensive in the US 1:16
New York (CNN Business)
An outbreak of deadly and highly infectious bird flu is forcing American farmers to kill millions of laying hens, reducing the country's egg supply and driving up prices.
On Thursday, retailers paid between $2.80 and $2.89 for a dozen grade A large white eggs in the Midwest, according to the Department of Agriculture's (USDA) daily Midwest regional egg report. .
That's more than double the roughly $1.25 they cost in March, according to data compiled by Brian Earnest, principal protein industry analyst at Cobank, which provides financial services to agribusiness.
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Large white eggs in that region typically cost $0.70 to $1.10 a dozen, Earnest said, noting Midwest prices serve as a national benchmark.
Around Easter, when demand is high, those prices can reach around US$2, he said, much lower than Thursday.
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Economic impact
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 flu detected in flocks across the country, Earnest noted.
It is the worst outbreak of bird flu in the US 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 it believes "the risk to public health from current flu viruses avian H5N1 is low.
Because the flu is so contagious and deadly to birds, USDA protocol is to kill infected flocks to slow the spread of the disease.
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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 spread by wild migratory birds, Carson explained.
Migration season typically lasts from March to May, he noted.
"As long as migration patterns continue, there is a risk that diseases will continue to be introduced into our national populations," Carson said.
More expensive eggs this summer
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.
In general, around Easter or Christmas, when people are most likely to bake, "we'll see a reduced price on the egg shelves."
So instead of raising prices, some stores appear to be dealing with higher costs by dropping 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'll see at least a 30 to 40 percent premium over [typical prices] during the summer months this year as a result of more limited 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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