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The spike in egg prices came about in 2008 when Americans saw their bills ballooning all over the grocery store.
Average egg prices jumped 49.1% in November from a year earlier—the largest annual percentage increase among all groceries in that period, according to the Consumer Price Index, a measure of inflation.
By comparison, the “Food at home” category was up 12%.
The increase is sharper when measured at the cost of a dozen large first-class eggs, which more than doubled to $3.59 in November from $1.72 in November 2021, according to data From the Federal Reserve Bank of St. Louis.
This price dynamics is primarily due to deadliest Avian influenza in the history of the United States, which killed millions of laying hens this year, according to economic experts.
“There’s a lot going on since 2020,” Bill Lapp, president of Advanced Economic Solutions, a consulting firm that specializes in food economics, told CNBC. “But the recent uptick is unusual in the shell egg markets, as well as the egg product markets.”
About 57.8 million birds will be affected by avian influenza in 2022, according to the USDA data As of December 28th. These numbers include birds such as turkeys and ducks as well.
Avian influenza is relatively rare in the United States. The last bout was in 2015, when 50.5 million birds—the previous record—were affected, depending to the Centers for Disease Control and Prevention.
Lapp said influenza had not appeared in at least a decade or two before that.
Here’s why that matters: Avian influenza is “highly pathogenic,” the New Jersey Department of Agriculture He said in October. It’s also very lethal: it is Kill 90% to 100% of chickens, often within 48 hours, depending to the Center for Disease Control.
Farmers generally have to kill their remaining birds — not by choice but because of federal rules intended to prevent the spread, Brian Moscogiori, global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, Calif., previously told CNBC.
About 40 million laying hens — “layers” in industrial shorthand — have died this year from bird flu, Moscogiuri said. There were 375 million total layers in the United States as of December 1, which is a 5% decrease from last year, according to the USDA.
The amount of eggs decreased by leaps and bounds. About 8.9 billion eggs were produced in November, down from 9.7 billion in December 2021, according to the Department of Agriculture. data Released December 20th.
“It’s a supply disruption, and it’s an ‘act of God’ kind of thing,” Moscogiori said. He called the situation “unprecedented.”
“It’s kind of serendipitous that inflation continues [more broadly] during the same period.”
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Experts said bird flu usually arrives during spring migration and disappears by summer. But this year it was different. The virus reappeared in September.
In October, the Department of Agriculture review Its forecast for table egg production for 2023 and the rest of 2022 is lowered after the “September discoveries” of bird flu.
The outbreak of avian influenza – and associated deaths of laying hens – is proceeding rapidly at peak demand. Experts said that consumers generally buy more eggs near the end of the year because of holiday baking, for example.
The Department of Agriculture suggested last October that consumer demand for eggs had been buoyed by a move away from some high-cost proteins amid broader food inflation. Outlook report.
Egg prices jumped 2.3% in November alone, and by 10.1% in October, according to the Consumer Price Index.
Lapp said higher egg prices “may continue into the first quarter of 2023.”
But price pressures appear to be easing, according to Moscogiori. This is partly a seasonal effect, as demand naturally eases after the holidays. He said it was also because record egg prices had dampened demand somewhat.
“The market is over the top now, and spot prices are increasingly negotiable,” Moscogiori said. “As the spot price drops lower, the market will follow and we will likely see a 25-30% retracement from the current all-time highs.
This adjustment is likely to take place over the next three weeks. He added that any additional large outbreaks of avian influenza could disrupt this trend.
A flock of broiler chickens inside a poultry house.
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Perhaps counterintuitively, chicken prices have been dropping in recent months, trending opposite to egg prices.
Chicken prices tumbled in October and November, falling 1.3% and 0.8% in those months, respectively, according to CPI data.
chickens raised for meat consumption – commonly known as “broiler– Not affected by avian influenza to the same extent as “layers”.
“They’re two completely different production styles, two completely different breeds of birds,” Moscogiuri said.
The life cycle of broilers is much shorter – from 5.5 to 9 weeks, from hatching to slaughter, depending For Vencomatic Group, a poultry consultancy.
Moscogiuri said this cycle can be over 100 weeks for a hen that lays eggs. Layers may take about five to six months to reach full productivity, depending for the Department of Agriculture. These are therefore more vulnerable to bird flu, experts said, as farmers have to keep them alive for longer.
The amount of broiler chicken is also on the rise, which is contributing to lower chicken prices in the grocery store.
The Department of Agriculture estimates that broiler “production” (measured in total pounds of meat) will rise 2% in 2023 compared to 2022.
Despite the recent downturn, chicken prices are still up 12% compared to October 2021, according to the Consumer Price Index. Commodity price hike Such as corn and soybeans – the primary ingredients in chicken feed – most likely contributed to chicken and egg inflation. Higher annual energy prices are also a factor in higher food distribution costs, for example.
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