Poultry markets in chaos

by Ron Sterk
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chickens in a barn
Highly pathogenic avian influenza has been detected in flocks totaling more than 33 million commercial poultry.

As of May 14, highly pathogenic avian influenza had been detected in flocks totaling more than 33 million commercial poultry — mainly chickens and turkeys — since it hit the key Midwest production region in early March. Incinerators are being shipped to the Midwest from other states to dispose of dead and euthanized birds. The situation is unprecedented in US agriculture, and the poultry industry, especially the egg products market, is in chaos.

“At the point of print, the industry has lost approximately 22 million laying hens, which represents a little over 7 percent of the national flock,” said Maro Ibarburu, associate scientist and business analyst, in a special report dated May 8 from the Egg Industry Center (EIC) at Iowa State Univ. “This results in a significant reduction in the egg supply and perhaps the largest short-term change the US egg market has ever experienced.”

The brunt of the impact of AI on eggs has been in Iowa, the nation’s largest egg producing state and the largest supplier of eggs for processing (versus graded eggs sold at retail). It was estimated about 40 percent of Iowa’s 58 million egg laying hens had been or will be culled due to AI as of last week.
“Grocery stores in some areas already have signs up notifying customers of short supplies and prices are beginning to climb,” one news service said last week.

Ibarburu said, “It is simply too early to project the effect on egg price under a major AI outbreak situation like this. There is no way to predict where a price change will occur along the chain of production and if that change will be passed on to consumers. There are so many variables in the marketplace that the retail egg price and eggs available have a very loose correlation when trying to project egg prices.”

While the price of graded eggs at retail may be the last to be affected, breaking egg prices used by processors have soared the past two to three weeks. Traders said prices quoted by Urner Barry, the nation’s primary private poultry and egg pricing source, were rising daily. Egg prices reported by the US Department of Agriculture also were increasing daily.

Prices of breaking stock eggs and some egg products have nearly doubled since mid-April, and prices for all products have increased sharply.

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