November 15, 2022

 

US egg prices are rising but chicken prices are declining

 

Egg prices in the US are surging at their fastest pace in decades, but chicken prices have dropped in October, primarily because of a severe bird flu outbreak in the country that has killed many many egg-laying hens but left chickens raised for meat production unaffected, CNBC reported.

 

According to the consumer price index released Thursday by the US Bureau of Labor Statistics, egg prices increased by 10% in October, the largest monthly increase of any grocery item.

 

In contrast, the No. 2 category, "food at employee sites and schools," saw a monthly price increase of 3.8%. That represents less than half the rise in eggs.

 

Federal data showed US consumers paid an average of US$3.42 for a dozen Grade A, large eggs in October, up from US$1.82 a year earlier.

 

One of the worst avian flu outbreaks in US history is primarily to blame for rising egg prices.

 

Since early February, the virus has affected about 50.3 million birds, according to recent information from the Centers for Disease Control and Prevention. These statistics also include birds like ducks and turkeys.

 

The US experiences very few cases of bird flu. The CDC reported that the most recent outbreak occurred in 2015 and affected a record 50.5 million birds. Prior to that, the flu hadn't broken out in at least a decade or two, according to Lapp.

 

Brian Moscogiuri, a global trade strategist at Irvine, California-based Eggs Unlimited, said farmers typically have no choice but to kill their remaining birds because of federal regulations designed to stop the spread of the disease.

 

Moscogiuri said this has caused about 37 million egg-laying hens, or "layers," to to be culled this year, or about 10% of American production.

 

The number of eggs has similarly decreased. The most recent statistics available from the US Department of Agriculture (USDA) show that approximately 8.8 billion eggs were produced in September, a decrease from approximately 9.7 billion in December 2021.

 

Experts said bird flu typically appears during the spring migration and disappears by the summer. This year, however, was unique because the virus returned in September.

 

Following "September detections" of bird flu, the USDA revised its production forecast for table eggs downward for 2023 and the remaining portion of 2022 in October.

 

The resurgence of the avian flu and the associated death toll for egg-laying hens coincides with the peak demand period, when consumers use more eggs for holiday baking, according to experts.

 

The USDA’s October outlook report showed a shift away from some more expensive proteins amid general food inflation has helped consumer demand for eggs.

 

Moscogiuri said an egg-laying hen's life span can be as long as 100 weeks. According to the USDA, reaching full productivity for layers can take anywhere between five and six months.

 

Therefore, because farmers must keep them alive for a longer period of time, the latter are more vulnerable to bird flu, according to experts.

 

Additionally, there are more broilers being produced, which lowers the cost of chicken at the grocery store.

 

For instance, the USDA reported that 865 million broiler chicks hatched in August, a monthly record that was previously set in March 2020 and 2.9% higher than August 2021.

 

The department reports that broiler "placements" have increased recently and reached a record 194.2 million chicks in the week ended September 17. Based on those "optimistic" hatch and placement data, the agency increased its production projections for 2023.

 

Despite a recent decline, the CPI shows that chicken prices are still up 14.5% from October 2021. Inflation in the price of chicken and eggs has most likely been caused by rising prices for basic commodities like corn and soybeans, which are the main components of chicken feed. Increased costs for distribution of food, for instance, are a result of higher energy prices.

 

-      CNBC