Egg price outlook 'impossible' amid bird flu crisis
June 2, 2015
by Laura Lloyd
Costs for eggs and egg products will increase due to the avian influenza outbreak.
KANSAS CITY, Mo. — The outlook for prices of US eggs and egg products in light of the current outbreak of avian influenza in the United States is nothing short of impossible, said egg expert Richard Broad, vice president of Bender, Goodman Co., Inc., at the Sosland Publishing Purchasing Seminar, held this week.
“The supply crisis will pass,” he said, “but the ramifications from this outbreak may last for years.” He mentioned egg replacers as a stopgap solution for food producers but said consumers will probably be able to tell the difference in taste and texture and may resist buying the new formulations. He noted significant obstacles to importing eggs from other countries. He said costs for eggs and egg products will increase “but how much isn’t known.” And he said some egg and egg processors will not be able to make the necessary changes to cope with what he called a staggering problem facing their industry.
“There is no playbook” on how to dispose of the millions of chicken and turkey carcasses, he added, or easy ways to repopulate commercial poultry operations with fresh birds, a process that can take months, if not years, to accomplish.
|Richard Broad, egg expert and vice-president of Bender, Goodman Co., Inc.
Speaking to a crowded room of seminar participants on June 1, Broad highlighted key factors facing both the domestic egg and egg products markets now that about 35 million hens in the United States have either died of the highly pathogenic strain of bird flu or been euthanized to try to contain the spread of the disease.
He said the current outbreak originated in wild migratory fowl that use the Mississippi Flyway to travel both north and south, a geographic area that happens to coincide with the 10 major US egg producing states. The first outbreak was discovered in the Pacific Northwest in December 2014, although thought to be carried by migratory birds. He said scientists are not entirely sure how the disease is transmitted, naming as possibilities bird droppings, saliva, rodents, water, animal feed, dust particles, among others.
Backyard and free-range chickens probably played a role as early hosts for the virus, unlike commercial flocks that usually are confined within structures that protect them from the elements.
He said the breaking industry that supplies egg products to domestic food companies has lost more than 30 percent of its hens already. He offered no prognostications on how long the outbreak will last, but he said repopulating after the epidemic passes takes a significant amount of time.
And he questioned the typical bromide that warm weather kills the virus, noting that Mexico has grappled on and off with avian flu in the last few years, despite warmer average temperatures than what is found in the United States.
Broad also noted that the US Department of Agriculture has indicated that a new outbreak of avian flu could easily occur in the fall, when wild migratory birds use flyways to travel south once again.
Though he offered little in the way of a silver lining — or a silver bullet — to businesses affected by the disordered and soaring price environment and tightening supplies in the egg markets, Broad said he thinks the old adage that the cure for high prices is high prices may help ration demand and force companies to be resourceful in making the best of a bad situation.
He said some restaurant chains already are cutting back on their available hours for consumers to buy breakfast items. He said some offerings may have to be removed from menus altogether for the foreseeable future.
“Maybe you’ll go into a restaurant and they’ll be telling you about their wonderful oatmeal,” he quipped.
And he said consumers will probably accept higher prices — up to a certain level — because eggs are regarded as an exceptionally well-priced protein source when compared with meat. But if prices move too high, a push-back is guaranteed, he said.