The price of eggs in the United States has skyrocketed by 543% in some regions with reports of an 18 count carton selling for $12 in Nampa Idaho.
Four primary factors are affecting this price spike: Residual supply chain issues from 2020, Culls from Avian influenza, Cost of feed Inputs, and seasonal production dips.
As we look at prices on the grocery store shelves, it is important to realize that the prices we see today reflect supply chain issues from not last week, but rather last year. It takes roughly 8-12 months for the full effect of a food crisis to make it from the front end of the food supply chain to our wallets.
In Light of this we go back to April and May of 2022, when enforced culling of flocks nationwide was taking place in an effort to eradicate avian influenza. In 2022, 50.54 million birds were culled from the US food supply chain and according to the USDA 43 million oft these were laying hens.
According to United Egg Producers, the total size of the US Laying hen population is roughly 328 Million hens. Which means that 12.35% of the total number of laying hens nationwide were eradicated.
An important note is that not every bird culled fro avian influenza was a carrier. According to the following quote by Reuters:
“Birds often die after becoming infected. Entire flocks, which can top a million birds at egg-laying chicken farms, are also culled to control the spread of the disease after a [singular] bird tests positive.” -reuters
TheGaurdian.com reported that in April 2022 Rembrandt Foods, “one of the World’s largest egg factories” “begun slaughtering more than 5 million chickens using a gruesome killing method after detecting a single case of avian influenza.”
While this is not the first time Avian influenza culls have swept the nation, what makes the situation in 2022 far worse than ever before is that the international food supply chain is still in recovery made from 2020. In 2020, we saw many farmers to euthanize massive flocks of laying hens rather than continue to feed them under supply chain disruptions and crashing demand there from (star Tribune).
According to the “Chickens and Eggs” released monthly by the USDA, egg production was down a cumulative _ in 2020. In 2021 production was beginning to recover, only to be hit again by the culls in spring of 2022 which caused another cumulative __ in production deficit. According to the USDA’s Economic Research Services “As a result of recurrent outbreaks, U.S. egg inventories were 29 percent lower in the final week of December 2022 than at the beginning of the year.”
All at a time when US per-capita egg consumption is on the rise. (https://unitedegg.com/facts-stats/)
A secondary factor is the skyrocketing cost of feed inputs. Grain prices in ’22 were triple in some categories from previous years. According to a study by the University of Florida’s Institute of Food and Agricultural Science: “Feed costs often represent more than 70 percent of the production cost of a dozen eggs”
A third factor, and likely the one responsible for bringing the former issues to such a severe head is the biological nature of laying hens causes a seasonal crash in production (USDA chart). This significant dip is not a result of national crisis, but rather the natural biological-rhythm of a laying hen, which involves highest production points in correlation with the Summer Solstice, and lowest production points in line with winter Solstice.
Given the unsteady nature of poultry production over the past 2 years, and increased consumer demand for eggs, and increased export demand, US production has not been able to amend for the seasonal deficit. Severe shortages and subsequent price increases are the result.
While those raising backyard flocks are in a much better situation, chances are that even backyard flocks are not producing very much at this point. As mentioned, the bio-rhythm of the laying hen, backyard flocks are also experiencing seasonal production slumps.
The good news is that rapid reproductive rate of chickens and their swift timeline to maturity will make the “egg shortage issue” a faster fix than many of the other food supply issues on the horizon. My estimation is that within 6 months, eggs will one again be within normal range… but you will likely never see eggs at the prices they once were.
At my local Aldi, eggs were $.79/dozen in 2022. The price is now $4.29/dozen. It will be the same as fuel and lumber: if we settle somewhere within 30-40% of normal range society will be happy.
What will be a more pertinent issue to prepare and watch for is the price of red meat over next 6-9 months. And if you want an look at the crisis from 2022 that is setting us up for a crash in 2023, please watch this video next. (Ranchers rush)
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