A flu epidemic of historic proportion has hit poultry farms across the United States, and the egg industry is scrambling for answers.
Avian influenza has been quietly ravaging poultry farms across the U.S. since December 2014. According to the USDA, over 48 million birds have been affected by the outbreak.
The Egg Industry Center says the resulting egg shortage is “perhaps the largest short-term change the U.S. egg market has ever experienced.”
Just how much is the price of this breakfast staple going up? In January, a dozen eggs cost New Yorkers an average of $1.20, according to Shayle Shagam, a livestock, dairy and poultry analyst at the USDA. After the avian flu hit epidemic size, that price peaked at $2.49.
“We are forecasting a decline of just under 7.994 billion dozen eggs,” Shagam told Opposing Views. “That’s a 4 percent decline that reflects the impacts of the [avian flu].”
An extra $1.29 may not seem like much to the average consumer, but it’s an unimaginable increase to bakers, diner owners and the food industry as a whole.
“We’ve paid $39 for 30-pound pails; now we are paying $87 for 30 pounds,” Gary Tolle, owner of The Baker’s Wife in Minneapolis, Minnesota, said in a phone interview. “And that’s when we can get them.”
It’s no surprise egg prices are surging in Minnesota. To date, nearly 9 million birds, including chickens and turkeys, have been affected by the outbreak.
Tolle explained that his bakery usually orders seven or eight 30-pound egg pails a week. That extra $384 is a lot for a small business, Tolle said, adding, “It just hurts us.”
According to Tolle, the shortage became more noticeable about a month ago, when the bakery ordered nine egg pails in preparation for several graduation parties. “They only sent us three,” he said.
Tolle then asked his sales representative what to do to ensure they get the eggs they need. The sales rep advised him just to order more. Tolle then ordered 12 pails. He still received only three.
Last week, he didn’t receive any at all.
Now, Tolle says, he must drive over to St. Paul, purchase eggs and bring them back.
To help offset the cost, the bakery has increased prices on just about everything by 10 cents. Tolle says he is trying his best not to pass the increased prices to his customers. Part of that savings also means producing less, “knowing that I’d rather run out and have them buy something else,” he said.
It’s not just the little guy that’s being hurt by the increase in egg prices. During the height of the outbreak, Whataburger announced it would be cutting back on its breakfast hours to serve fewer eggs. It has since increased its hours again, but has cut back on serving some egg-filled products.
Some supermarkets are also asking customers to limit their egg purchases. H-E-B, a grocery store based in Texas, is limiting sales to three dozen per customer.
A few companies seem to be benefiting from the shortage, including Cal-Maine, the nation’s largest egg producer. Just last year, Cal-Maine became the first egg producer to sell 1 billion dozen eggs in a year, according to Alan Andrews, the company’s director of marketing.
Cal-Maine has been lucky so far in the outbreak, as none of the 36 farm locations it owns has been hit by the avian flu. But that doesn’t mean the company is sitting idly by.
“We are as vulnerable as any other egg producer in the country,” Andrews said.
But because its product has yet to be hit, Cal-Maine has become the goose that lays the golden eggs. Since March, Cal-Maine’s stock has increased from $37.78 a share to $54.85.
“I think any stockholder is happy when any stock goes up,” Andrews said when asked about its current investor relations.
Part of keeping its investors happy is protecting the flocks.
Andrews noted that Cal-Maine is taking advice from the USDA on how to protect its birds very seriously.
“Initially what we were seeing was point-source introductions,” USDA veterinarian T.J. Myers said, adding that the virus was found to be secreted from infected wild birds. “And then, as time has gone on, we’ve seen additional cases where it looked more like it was being spread from farm to farm.”
Myers also stressed that this strain of avian flu cannot be passed to humans.
While there is little to nothing that can be done about wild birds spreading the flu, Myers noted that there is plenty to be done to protect farm-to-farm transmission.
Myers suggests farmers tighten their “biosecurity” by having employees take a shower before entering the premises and taking another on the way out, not sharing equipment with other farms, and not allowing the general public to visit the farms.
Cal-Maine is following these steps and more.
“It’s not rocket science,” Andrews said. “We are doing everything we can that we think is the right thing to do.”
Another thing farmers can do is report when they have a high mortality incident in their flock.
As part of the National Poultry Improvement Plan (NPIP), farmers can report deaths in their flocks and receive assistance from the USDA. If they must kill off their birds, they will receive fair-market payouts for their birds thanks to the Animal Health Protection Act of 2002.
The worth of the bird is calculated by adding the costs of raising it, its intended use and market prices, which are updated on a regular basis. It may even cover the cost of disposing of the culled birds and cleanup.
Participating in the NPIP is not mandatory. If a certain farm is not a member but decides to report bird deaths anyway, it can receive up to 25 percent of the fair-market value for them.
Though, Myers noted, if you’re a large producer of poultry products and you have to market your birds, you’re going to want to be a part of the organization.
There is a bit of good news for farmers: Summer is nearly in full swing, which means warmer temperatures that the virus hates. This has helped stem the tide a bit, according to Myers. However, it may just be a few month respite.
“We do have concerns about the fall because the birds that are carrying the virus are migratory,” Myers said, explaining that the virus-carrying birds will fly to Canada for the summer, then fly south for the winter. At which point, he said, “we don’t know exactly what viruses they will be carrying.”
What can the general consumer of eggs do right now? As Tolle said with a laugh: “Buy egg stock. That’s my only advice.”
Photo Credit: WikiCommons