An Eggsposé of Sorts
Questioning if the avian flu is truly to blame for rising (again) egg prices.
As I shared previously, egg prices rose significantly in December, almost nine percent. The January Consumer Price Index released this week shows egg prices once again outpaced all the other food we buy at the grocery store by three percent. Rotten news for your morning scramble or egg salad sandwich. Especially if you buy organic or pasture-raised, as premium eggs are less likely to experience a subsequent drop in prices.
Mainstream media reports in December cited a resurgence of the avian flu; however, direct quotes from actual producers (as opposed to economists or lobbyists) prove hard to find.
Boring But Relevant Background
So many questions, I had (spoken with my best Yoda impression). One was how the resurgence of sick birds at the end of last year compared to the initial outbreak in early 2022. Avian flu receded last year, and egg producers rebuilt their flocks to the tune of 322 million birds.
The number of egg-laying hens at the beginning of both the initial outbreak and last year’s resurgence was about identical (the same report from February 2022 lists 323 million egg-laying hens). So, this particular starting line was more or less equal. And as it turns out, the number of egg flock avian flu infections back then and late last year are similar.
Cue the dramatic music.
Two Questions
Did prices surge as much in early 2022 as they did around the holidays?
Does the latest avian flu outbreak justify the recent round of price hikes?
My Sources
I am not a data scientist or egg supply chain expert, but as a former news reporter, I know publicly available data can be revealing. The following is a summary of what I found, in the order I found it, spelled out like you’re in fifth grade. I relied on data and experts at the USDA, the Bureau of Labor Statistics (BLS), Purdue University, FRED by the Federal Reserve Bank of St. Louis, and a professor of agriculture at the University of Wisconsin-Platteville to confirm, refute, and help me interpret the data.
Note: Any reference to hens or flocks refers to ones that feed the table egg industry beast.
The Santa Spike and 2023 Dip
An imperative mention is that egg prices typically spike a little (say two percent, on average) at the end of the year. Producers and retailers capitalize on your need for eggs in French macarons, American macaroons, eggnog, and cookies for Santa (Easter can see a similar trend, but not always and not as lengthy). While a dozen eggs got more and more affordable during 2023, the price started ticking up again in September.
The Aforementioned Exposé
In the first two months of the outbreak in 2022, February and March, 18.7 million birds died. That was about 5 percent of flocks then.
The monthly eggflation in March of 2022? Around 2 percent.
In the last two months of last year, producers lost 14.2 million birds (4 million less than in the beginning). That was roughly 4 percent of the existing flocks last November.
December’s climb? Almost 9 percent.
Amidst similar outbreak numbers, there is a difference of about eight percent in retail inflation. Back in 2022, egg prices didn’t skyrocket until April, when total infections pushed 30 million.
Data sources: USDA, BLS Consumer Price Index February 2022, March 2022, April 2022, November 2023, December 2023, and FRED.
A Complicated Web
The egg industry comprises producers, distributors, shippers, packers, and retailers. While not as concentrated as the meat industry, ten corporations own almost half of the U.S. market.
Here are the behind-the-scenes prices paid by members of the egg supply chain to each other in December:
The Producer Price Index (what farmers get paid) decreased.
Wholesale prices (what retailers pay) mostly declined or held steady.
The price index for feed fell slightly.
Bottom line: A bit of down, mostly steady in farmer and distributor December egg pricing. The same measures in 2022 were steady for February and early March, but wholesale prices soared heading into April as infections accelerated.
Data sources: BLS Producer Price Index December, USDA Weekly Egg Markets Overview (specifically February and March 2022, September 2023 through January 2024)
Eggcellent USDA Insurance
Farmers and commercial producers aren’t required by law to report cases of avian flu. But it is in their best interest to do so, as it takes about six months to regrow a large flock. And once the USDA confirms the infections, producers are paid market price for:
All the eggs and sick birds they can’t sell or raise.
Depopulation (a clinical word for euthanizing and disposing of sick birds).
Contaminated materials like egg cartons and general cleaning expenses.
I wish I had that kind of support when my kids bring home the flu (minus the depopulation part).
Eggible Epilogue
In December, a jury found the two largest egg producers guilty of price fixing for the eggs they sold to food giants like Kraft and Kellogg. Still, factors influencing the retail price of eggs are nuanced in a commodity market that includes many players between the farm and the grocery checkout. Correlation certainly doesn’t prove causation.
But with the similarities in the outbreaks of last year and early 2022 and the stark difference in inflation, I am not convinced the avian flu is the sole perpetrator of the new and continued price pain.
The hen house might be free from foxes. I wonder about the warehouse.
Eat + be well,
Christina
P.S. Please share your take on the current egg and food prices and if it has affected your choices by emailing me or in the comments. Or, let me know if you think I’m crazy. I would love to hear from you, especially if you work in the poultry or egg industry or are versed in eggonomics.