Tag: Changing

I wish I had good news about eggs, but alas, I do not. Egg prices are soaring again as the bird flu sweeps the US for the third straight year, cutting into supply. On the other side of the equation, seasonal factors have pushed demand up (all that holiday baking and cold winter weather makes people into egg-heads), and consumers have been buying eggs more than normal for the past couple of years. Those conditions aren’t changing anytime soon, especially on the supply side. If I’m searching for a silver lining here, I guess it’s that once you scare yourself enough about the potential implications of the bird flu for humans, you’re not so worried about the price of eggs. But for now we’ll focus on egg prices and the bad news on that front: Supercheap eggs are not on the horizon.

If there’s a single product that epitomizes what consumers hate about high prices nowadays, it’s eggs. People buy them regularly and therefore know their exact cost. They’re ingredients in a lot of foods. And if you’re looking for a protein source, they’re one of the healthier alternatives out there that won’t break the bank. Except they’re not so inexpensive anymore.

The cost of a dozen grade-A large eggs hit $4.15 in December, per the Bureau of Labor Statistics, up from $2.51 a year ago. The average price of eggs hasn’t been below $3 since June, and it hasn’t been below $2 since the start of 2022. Wholesale prices paid by entities such as restaurants, grocery stores, and schools are much steeper: According to the global commodities tracker Expana, wholesale Midwest large eggs are $7.27 a dozen; the five-year average is $2.10. There’s a lot of variation depending on where you live and where you shop — eggs can be a loss leader, meaning grocery stores discount them to get people in the door, and big-box stores in particular price them quite low. Citing data from Circana, Expana said the average cost of large eggs among smaller retailers was $5.31 a dozen. They’re probably cheaper at Walmart and Costco. If you’re in a state with laws about cage-free eggs, you might see higher prices than you would in a state without them. No one knows when prices will come back down. This interminable bird flu might not be an aberration, and other factors, such as the push to move toward cage-free eggs, may keep prices up, too. The acute causes of this price spike — a drop in supply, a jump in demand — point to long-term structural issues that might stick around.

“We are all in uncharted territory,” said Brian Moscogiuri, a global trade strategist at Eggs Unlimited, a California-based egg supplier. He added that the industry had lost 26 million birds since October, more than 7% of the total flock. “It seems as bad as it has ever been,” he said, “and the producers don’t really have a recourse.”

In other words, there’s not much relief in sight.

“It seems highly unlikely we’ll see a $2 egg market anytime soon,” said Karyn Rispoli, a managing editor for eggs in the Americas at Expana. “There’s no way for sure to say this is going to go on in perpetuity, but in the near term there doesn’t appear to be any resolution.”

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The bird flu — or, as it’s formally called, highly pathogenic avian influenza — is not new. A bird-flu outbreak in the US in 2015 led to a spike in the prices of eggs. But that bout of illness lasted only a season; it showed up during a migration period, as wild birds moved across the US, so it hit in the spring and died out in the summer. The problem with the current iteration is that it’s not going away. It’s continuing to spread, in birds and elsewhere — in dairy cows, in cats, and in people.

We are all in uncharted territory.

“By any metric, you look at animal epizootics, basically animal-based-pandemics, this is the largest one we’ve ever had,” said Maurice Pitesky, an associate professor at the UC Davis School of Veterinary Medicine who focuses on highly pathogenic avian influenza and disease modeling. “It’s in the environment. We see it in dairy lagoons. We see it in human wastewater. So it’s ubiquitous at this point.”

Typically chickens pick up the bird flu from waterfowl — think ducks and geese. But now they’re getting it from a lot of sources. Sick cows can get the chickens sick because of shared equipment. An infected turkey farm up the road can infect a chicken farm as the airborne pathogen spreads in strong winds. Because it’s been dealing with the issue for so long, the poultry industry is better prepared for a bird-flu outbreak than, say, the dairy industry, but there’s only so much egg farmers can do to prevent it.

“US egg farms have the most stringent and comprehensive biosecurity of any poultry farms on the planet,” Emily Metz, the president and CEO of the American Egg Board, a nonprofit that promotes and markets eggs, said in an email. “Unfortunately, even the best biosecurity isn’t foolproof.”

Once one chicken tests positive for the bird flu, the entire flock has to be culled (as in killed). Some farms have been wiped out several times over the past few years, and so many places have been affected that repopulation — getting new chickens to get the farms up and running again — is increasingly difficult. Given the scale, there’s not a clear playbook for turning things around.

“Not only are we worse off now than we were three years ago, but I have not heard from any state or federal agency what the ‘plan’ is other than they keep doing the same exact thing,” Pitesky said.

After an outbreak, producers get indemnification from the government, meaning they’re paid back for their losses so they don’t go out of business. They quarantine and clean and disinfect. And then everyone waits to see if they’re hit again.

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“Those are all good things, but those are after-the-fact things,” Pitesky said. “We don’t have anything that’s really been employed that tells people — almost like a red light, green light — here’s where we’re having outbreaks, here’s where we think the virus is moving next.”

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There is no single answer for why this bout of bird flu is so bad. It’s partly a development issue and partly a climate-change issue. Some of it is that this strain appears to be more infectious than others, and in many more species. States such as California have lost most of their natural wetlands, meaning waterfowl are using different habitats closer to farms than in the past, which is more conducive to disease transmission. Migration patterns are changing. This all means there’s no single solution or way to be sure it won’t just keep happening.

“The thing is there really isn’t another silver bullet that can be implemented to potentially stop it,” Moscogiuri said.

Meghan Davis, an associate professor at the Johns Hopkins Bloomberg School of Public Health who studies environmental epidemiology, said some changes were making animals more susceptible to the virus as well. They may be more stressed because of climate change and resource availability, which could exacerbate their vulnerability. And then there’s just the way we farm — animals packed together in giant facilities stacked on top of one another.

As for solutions, better surveilling and tracking of where the virus is headed is an important start. “You can literally rank and triage where you need to harden and improve your husbandry and biosecurity by doing that,” Pitesky said. “That’s a very scalable solution.”

A lot of these investments — in tracking, surveillance, improving biosecurity, implementing rodent control for pests that may carry the bird flu, hiring more workers, and more — cost money, though, and can be a tough sell for farmers who are already hurting and may not want to pony up. And if they do, well, that increased cost is going to show up in your egg prices.

Sometimes vaccines can actually mask things and make things worse down the road.

Moscogiuri said he wasn’t sure producers had much recourse besides hoping a vaccine is approved for mass use for poultry in the US, but even that’s complicated. Which birds are we talking about? Egg-laying chickens? Turkeys? Others? What if they need boosters, or the virus mutates, or the animals still get the virus?

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“Sometimes vaccines can actually mask things and make things worse down the road as opposed to identifying which animals are diseased, depopulating them, and preventing further disease transmission,” Pitesky said.

There are also trade issues, particularly for chickens exported for consumption, which are called broilers. Some countries don’t want to import vaccinated birds because they worry that vaccines make the virus harder to detect.

“We have a lot of trade agreements that can be impacted if a country can’t differentiate infected from vaccinated animals,” Davis said.

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Beyond the fight against the bird flu, plenty of other factors are helping push prices to this uncomfortable level. A not-insignificant part is on the demand side, which might mean some relief is ahead. The holidays are always a big time for eggs because of all that holiday baking. Cold winter months can lead to higher demand, because when bad weather hits and people panic-buy, they grab eggs. And then comes Easter, which is also egg-heavy.

Demand usually cools off in the summer, which is good to know, but it may not be enough to help with prices. Metz, from the Egg Board, said the volume of eggs sold in stores had been up year over year for 22 consecutive months. American consumers seem to have been heavy on eggs for a while now. Even at higher prices, eggs are still a budget-friendly option for protein, especially in the recent inflationary environment. They’re also viewed as nutritional, so if you’re on a health kick (and not a vegan), you might be incorporating eggs into your diet more than you used to.

To put it plainly, it’s expensive to be nicer to chickens.

Metz emphasized that the industry had seen four years of “extraordinary circumstances,” including the pandemic and accompanying supply-chain challenges, high inflation, and the bird flu. “While no one can predict the future, egg prices are anything but static,” she said, adding that none of these factors was permanent.

There are some non-bird-flu supply factors that could make higher egg prices sticky, too. A push to require eggs sold in certain states to come from cage-free chickens is contributing to increased prices in those places. California and Massachusetts, for example, have had cage-free laws in place for a few years, and such rules just went live in Colorado and Michigan. To put it plainly, it’s expensive to be nicer to chickens.

“Large eggs on the West Coast right now are $8.86, and that’s because California and the Pacific Northwest mandates cage-free eggs on shelves,” Rispoli said, adding that bird flu was exacerbating the issue. “Any state where cage-free supplies are mandated are going to face additional challenges just because of the amount of cage-free production that’s been lost to the bird flu,” she said.

If you’re annoyed by the price of eggs, you’re not alone — a lot of people are. Inflation and persistently high prices have made grocery shopping an ever more frustrating experience, and looking at the price tag on a carton of eggs is like a mini punch in the stomach every time. Eggs are a commodity, meaning the price is always going to bounce. But given the broader context, the overall trend might be upward to a not-so-eggcellent extent.

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Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.