Bird Flu in U.S. Might Drive Up Egg Prices by the Billions, Analysts Say
WASHINGTON, May 21 (UPI) — What do the following foods have in common? Caviar, roasted duck, lobster tails, Kobe beef, sashimi, eggs.
In the near future, they might all be luxury fare — as the recent outbreak of bird flu in the United States might drive up the price of eggs by the billions, analysts say. While that analogy may be a bit of an exaggeration, experts say the reality is that eggs and egg-related products are already being severely impacted by the virus’ spread.
The first case was reported in December and by the end of the month, many cases of H5N2 had gotten on the books. That particular strain of bird flu hasn’t been kind to farmers and may now cast a large and expensive shadow over the U.S. egg industry, analysts believe.
Consumers may now have to pay 75 percent more for eggs than they did a year ago,Goldman Sachs analysts said in a report Wednesday.
In dollar figures, that’s between $7.5 and $8 million more. And officials estimate that about 10 percent of the entire U.S. egg supply has been affected by the outbreak.
“I can’t tell you how many farmers this is affecting,” United Egg Producers director Oscar Garrison said. “It’s been absolutely devastating. Just abysmal.”
The reason for the staggering increase is a direct result of the flu’s spread in the U.S. Midwest earlier this year. For two months, farmers battled the outbreak and almost 25 million egg-laying hens died from the disease — depriving farms of the scores of eggs they certainly would have otherwise laid.
Nearly 40 million birds — including chickens and turkeys — have been affected by the outbreak since December, agricultural officials said.
Farmers have been forced to kill hundreds of thousands of their birds in an effort to keep the disease from spreading, which experts believe it will.
“The situation could deteriorate further before it ultimately gets better,” the Goldman Sachs analysts noted.
Also, the impact of the U.S. bird flu cases will affect more than just eggs themselves. The effects are likely to accompany many or all products that are made with eggs — such as mayonnaise and some candies.
Businesses, such as McDonald’s and General Mills, are expected to feel the crunch as well. Eggs comprise about 25 percent of McDonald’s revenue — almost twice as much as its competitors, officials say.
The American Egg Board said the average person ate 260 eggs last year alone, meaning consumers should definitely feel the financial impact of this year’s bird flu.
Analyst Urner Barry said the price for wholesale breaker eggs reached an all-time high of $1.23 per dozen last week. Liquid egg products, like egg beaters, jumped from 63 cents to $1.50 per dozen by April.
“Look, there is pretty much no doubt that this will have an effect on the supply of all eggs,” Garrison said. “That will come with its price consequences.”
Analysts and farmers hope that a hot summer will severely weaken and ultimately kill the flu. If it doesn’t, farmers may face a similar scenario next year.
