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Deadly bird flu sends egg prices soaring

new York
CNN Business

A deadly and highly contagious bird flu is forcing US farmers to kill millions of laying hens, reducing the nation’s egg supply and driving up prices.

On Thursday, retailers paid between $2.80 and $2.89 for a dozen large white Grade A eggs in the Midwest, according to the USDA’s Daily Midwest Regional Egg Report. This is more than double the roughly $1.25 they cost in March, according to data compiled by Brian Earnest, senior protein industry analyst at Cobank, which provides financial services to agribusiness.

Typically, large white eggs in this region cost between $0.70 and $1.10 per dozen, said Earnest, who noted that Midwestern prices serve as a national benchmark. Around Easter, when demand is high, those prices can hit around $2, he said, much lower than they were on Thursday.

Rising feed costs and supply chain challenges have made many food products more expensive this year, and eggs are no exception. But that particular spike is driven by highly pathogenic bird flu that has been detected in flocks across the country, Earnest noted. It is the worst bird flu outbreak in the United States since 2015.

Although influenza is deadly to poultry, it is “primarily an animal health issue”, according to the Centers for Disease Control, which added that they believe “the health risk to the general public from to current H5N1 avian influenza viruses is weak”.

Because the flu is so contagious and deadly to birds, USDA protocol is to kill infected flocks to curb the spread of the disease.

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 department. of Iowa Agriculture. As a result, “we had to depopulate 11.2 million laying hens,” out of about 56 million laying hens in Iowa, she said.

This particular strain of the flu is spread by migrating wild birds, Carson explained. The migration season usually lasts from March to May, she noted.

“As long as migration patterns continue, there is a risk that the disease will continue to be introduced into our national populations,” Carson said.

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 the eggs to drive in-store traffic,” he said. Typically, around Easter or Christmas, when people are more likely to cook, “we’ll see a reduced price on the shelves for eggs.”

So, rather than raise prices, some stores seem meet the higher costs by eliminating their egg promotions.

“Retail promotional activity was very limited and did little to incentivize buyers to buy beyond immediate needs,” according to the USDA’s Weekly Egg Markets Overview, released last Friday.

Eventually, however, prices are likely to rise.

“I would expect to see at least a 30% or 40% premium on top of [typical prices] during the summer months of this year due to tight supply,” Earnest said.

He also noted that even before the flu was detected in the United States earlier this year, the number of laying hens was relatively low. And stocks of frozen or dry eggs are “significantly down from what they usually are,” he said. This could mean there will be egg shortages later this year.

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