Why the price of eggs is surging – but the price of chicken is falling

A shopper checks out a carton of eggs at a grocery store in San Francisco on May 2, 2022.

David Paul Morris Bloomberg | Getty Images

Which (price change) comes first, the chicken or the egg?

The price of groceries is growing at the fastest rate in decades – nothing more than eggs. Yet the price of chicken fell in October.

It seems counterintuitive that the price of eggs and chickens moved in the opposite direction.

This dynamic is mainly due to the severe outbreak of bird flu in the US – which has killed many egg-laying chickens but has largely left chickens raised for the production of unscathed meat, according to economists.

“A lot of things are coming up since 2020,” said Bill Lapp, president of Advanced Economic Solutions, a consulting firm specializing in food economics. “But the recent spike is remarkable in the shell-egg as well as the egg-product market”.

Unprecedented disruption of egg supply

The rise in egg prices is the result of one of the worst bird flu outbreaks in the US.

About 50.3 million birds have been affected by the virus since the beginning of February 2022, according to the latest. data from the Centers for Disease Control and Prevention. This figure includes birds like turkey and ducks, too.

Bird flu is relatively rare in the U.S. The last outbreak was in 2015, when a record 50.5 million birds were affected, the CDC said. said. The flu hadn’t appeared for at least a decade or two before that, Lapp said.

Here’s why this is important: Bird flu, which is common portable by wild birds like ducks and geese, is “highly contagious,” the New Jersey Department of Agriculture impress last month. This is also very lethal; this kill 90% to 100% chicken, often within 48 hours, according to to the CDC.

Luke Sharrett/Bloomberg via Getty Images

Farmers generally have to kill the remaining birds — not by choice but because of federal rules meant to prevent the spread, said Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, California.

As a result, about 37 million egg-laying chickens — “layers,” in industry shorthand — have died by early 2022, Moscogiuri said. That’s about 10% of US production, he said.

The number of eggs has cratered in lockstep. About 8.8 million eggs were produced in September 2022, down from about 9.7 million in December 2021, according to the latest. data from the US Department of Agriculture.

“This is a supply disruption, an ‘act of God’ type of thing,” said Moscogiuri, who called the situation “unprecedented”.

“It is an event that inflation occurs [more broadly] at the same time,” he added.

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That avian flu flare-up — and its associated death toll for egg-laying hens — is running headlong into peak demand season, when consumers use more eggs for holiday baking, experts said.

Consumer demand for eggs is also being driven by a pivot away from some higher-priced proteins amid broader food inflation, the Agriculture Department suggested in October. report outlook.

High egg prices “could last until the first quarter of 2023,” Lapp said.

‘Broilers’ less affected by flu than ‘layers’

Meanwhile, chicken prices retreated in October, down by 1.3% over the month.

The wholesale price of chicken breasts has fallen below $1.20 a pound, a third of the peak of about $3.60 in the summer, for example, Lapp said.

Chickens raised for meat consumption – known as “chicken broilers“- is not affected by bird flu to the same extent as the “layer”.

“These are two different styles of production, two different types of birds,” Moscogiuri said.

The life cycle for broilers is much shorter – anywhere from 5.5 to 9 weeks, from hatch to slaughter, according to to Vencomatic Group, a livestock consulting firm.

A group of broiler chickens inside the poultry house.

Edwin Remsberg Image Bank | Getty Images

However, the life cycle for an egg-laying hen can exceed 100 weeks, Moscogiuri said. It takes about five to six months for the layer just to reach full productivity, according to to the Department of Agriculture.

The latter become more vulnerable to bird flu because farmers have to live longer, experts say.

The quantity of broilers also increased, contributing to lower chicken prices in grocery stores.

For example, about 865 million broiler chickens were processed in August – 2.9% higher than August 2021 and the monthly record, which was previously set in March 2020, Department of Agriculture. said.

Broiler placements have also increased in recent weeks, hitting a record of 194.2 million chicks in the week ended September 17, according to the Department. The agency raised its 2023 production forecast on that “optimistic” hatch and placement data.

Despite the latest setback, chicken prices are still up 14.5% compared to October 2021, according to the CPI. high prices for commodities like corn and soybeans – primary ingredients in chicken feed – have likely contributed to inflation for chickens, as well as eggs. Higher energy prices also lead to increased food distribution costs, for example.

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