Bird flu is driving up the price of more than just eggs and poultry

U.S. food prices are rising, but the shock to supermarkets is especially acute in the egg and poultry aisles as a highly contagious bird flu decimates commercial poultry flocks in the U.S.

highly pathogenic bird fluor bird flu, is spreading across the US, forcing farmers to destroy about 280 commercial and backyard livestock in 32 states since January.

“More than 28 million laying hens have been culled as a result of bird flu — that’s nearly 9% of the total flock,” according to Karyn Rispoli, egg market reporter at commodity research firm Urner Barry.

“When the outbreaks started, the jump in wholesale values ​​was being mainly driven by demand as there was a bit of panic and short coverage in the market. offer,” Rispoli said in an email.

Carried by free-flying waterfowl – such as ducks, geese and seabirds, and infecting chickens, turkeys, pheasants, quail, domestic ducks, geese and guinea fowl – the outbreaks are driving up the price of two commodities that are everyday items on the American market. diet.

“Chicken and egg really hold a strong position in our daily consumption. The supply goes down and the price goes up,” Kathleen Liang, a professor of sustainable agriculture at North Carolina Agricultural and Technical State University, told CBS MoneyWatch.

Cost of eggs on the rise due to inflation and deadly bird flu


Bird flu continues to spread, especially in flocks of laying hens, wrote economist Lee Schulz, an associate professor at Iowa State University, in a blog post. When the flu hits, some birds die and others must be euthanized. That reduces the supply of eggs, a commodity for which there are few substitutes, he explained.

The immediate result: The wholesale price of processed “cracker” eggs nearly tripled in May, while wholesale prices for supermarket eggs jumped 85% to $2.20 a dozen in the Midwest, Schultz noted. The impact will lessen over time as the industry raises more chickens, he added.

“Highly pathogenic avian influenza (HPAI) outbreaks continue to impact the table egg industry, especially in the egg products sector, where nearly three-quarters of outbreaks have occurred,” the U.S. Department of Agriculture wrote in a report this week. last.

Nationally, the average price for large Grade A eggs last week was $1.66 a dozen, up 12% from the previous week and nearly 73% from last year, according to the USDA.

Meanwhile, consumers are paying about 5% more for whole chickens than they were a year ago, making poultry a relative bargain as general supermarket prices are 10% higher and the price of beef is up 16% , show federal data.

“The chicken and eggs are just the beginning of the ripple effect,” Liang said. “The downstream industries are the ones that absorb the highest costs.”

Salad dressing, cake mix and fries

The cost of processed eggs — used in liquid or powdered form in manufactured products including salad dressing, cake mix and potato chips — has also increased, adding to inflationary pressures.

Broken eggs, which are sold in liquid form to wholesale bakeries and large restaurant chains, were priced at $2.58 a pound on Tuesday, according to Urner Barry.

“That’s up from 86 cents a pound in early March, just after the first outbreak was confirmed,” noted Rispoli, who added that at this point last year, broken egg prices were at 49 cents a pound.

When the avian flu outbreak affected 24 states and about 24 million commercial birds, only eight cases were confirmed in commercial broilers. More than 60% of US chicken production takes place in six states: Alabama, Arkansas, Georgia, Mississippi, North Carolina and Texas. So far, only North Carolina and Texas have had outbreaks.

“Sick birds will never make it to the market,” Liang said of the potential for a significant reduction in supply, pending containment of outbreaks. “Demand is strong and supply is limited.”

As the bird flu spreads, the turkey industry has also been impacted, with production estimates for the year revised down by 150 million pounds, the USDA said in an April analysis. Whole chicken frozen turkey prices were reported at $1.31 per pound in the first quarter, up 19% from 2021.

“With lower forecast production due to the HPAI, prices are expected to continue to rise at a faster rate in 2022,” the agency said.

People should expect food inflation to continue this year and next, according to BofA Securities analyst Alexander Lin, who expects food prices to rise about 9% this year and another 4% in 2023.

Low health risk for people

In Colorado, a prisoner tested positive for bird flu after working on a commercial farm as part of a pre-launch employment program, the state said Thursday. The only other known human case was reported in the UK late last year, according to the Centers for Disease Control and Prevention.

The public health risk related to bird flu remains low, according to the CDC. Still, cooking all poultry and eggs to an internal temperature of 165˚F is recommended as a general rule of thumb for food safety.

The USDA is investigating a vaccine to fight the flu, which killed more than 50 million chickens and turkeys between 2014 and 2015 and caused economic losses of $3.3 billion, the agency estimates.

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