Egg prices have been on the rise in the US in recent years, with predictions of further increases in 2023. But why is this happening? In this article, we explore the various factors contributing to the increase in egg prices and what it means for the poultry industry and consumers.
The Impact of Avian Influenza
One of the major factors driving up egg prices in the US is the impact of avian influenza (AI) on poultry flocks. In 2015, an outbreak of highly pathogenic avian influenza (HPAI) led to the culling of over 48 million birds, including chickens and turkeys, in 21 states. The loss of so many birds caused a significant reduction in egg production and triggered a sharp rise in egg prices.
Since then, there have been additional outbreaks of AI in various parts of the country, leading to more flock culling and reduced egg production. As a result, egg prices have continued to climb, and industry experts predict that the trend will continue into 2023.
Another factor contributing to the rise in egg prices is the cost of feed. Poultry feed typically includes a mix of grains, such as corn and soybeans, as well as other ingredients. The cost of these ingredients can fluctuate based on various factors, including weather conditions, global demand, and transportation costs.
In recent years, droughts and other weather-related events have led to lower yields of grains, which in turn has caused the cost of feed to rise. This increased cost is then passed on to consumers in the form of higher egg prices.
Changing Consumer Preferences
The increasing popularity of cage-free eggs is also contributing to the rise in egg prices. Consumers are becoming more concerned about animal welfare and are willing to pay a premium for eggs produced by hens that have more space to move around and exhibit natural behaviors.
While cage-free systems are more expensive to operate, they are becoming more common as retailers and food service companies respond to consumer demand. This shift in production methods has led to higher costs for producers and ultimately higher prices for consumers.
The poultry industry in the US has undergone significant consolidation in recent years, with a small number of large companies controlling a significant portion of the market. This consolidation has led to greater efficiency and economies of scale, but it has also made the industry more vulnerable to disruptions such as disease outbreaks or supply chain disruptions.
As a result, any disruption in the supply chain can have a significant impact on egg prices. For example, the COVID-19 pandemic caused temporary closures of processing plants, leading to a reduction in egg production and higher prices.
What Does This Mean for Poultry Farmers?
The rising cost of eggs may initially seem like a boon for poultry farmers, but the reality is more complicated. While higher prices may lead to increased revenue in the short term, it's important for farmers to consider the long-term sustainability of their operations. Higher egg prices can also lead to increased competition among poultry farmers, which can drive up costs for feed and other necessary supplies.
In order to manage the impact of higher egg prices, poultry farmers may need to explore alternative feed sources or adjust their production practices to optimize efficiency. It may also be worthwhile for farmers to consider diversifying their product offerings, such as by selling other poultry products like meat or feathers. By taking proactive measures to adapt to changing market conditions, poultry farmers can position themselves for continued success in the face of rising egg prices.
USDA Economic Research Service. (2023, February 22). Egg Prices Up Sharply in January. https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=100052