Economic Tidbits

HPAI Verses The Egg

Highly pathogenic avian influenza (HPAI) has struck poultry producers once again this year. The highly contagious virus was first detected in North America in December 2021 and by March of this year had spread nationwide. Wild birds and “backyard” poultry flocks have been affected in nearly every state and large commercial producers in 24 states have lost birds. According to the Animal Health and Inspection Service (APHIS), over 47 million birds for production have been culled because of HPAI infections so far this year. During the last major outbreak in 2015, the reported bird loss was 50.5 million. With cases still being reported this year, the two events are extremely comparable in terms of scope.

Egg layers account for the largest share of HPAI detections among production birds with 77 percent of all affected birds. In Nebraska, two large commercial egg producers reported infections in their flocks in April which resulted in the depopulation of nearly 4 million birds, roughly half of Nebraska’s egg laying population. Egg production numbers for the state reflected this bird depopulation. Only 109 million eggs were produced in June compared to 213 million three months earlier.

Figure 4 shows monthly egg production in Nebraska since 2008 (blue line) and the number of birds affected by HPAI during the outbreaks in 2015 and 2022 (red lines). The impacts to egg production of the HPAI outbreaks can clearly be seen. In both cases, egg production fell by about 100 million eggs. The state’s flock was bigger in 2015, so the production loss then was a bit larger compared to this year. However, barring any more major outbreaks, Nebraska producers appear to be on track to return to normal levels of production several months sooner this year compared to 2015.

Figure 4. Nebraska Monthly Egg Production Response to HPAI

Source: USDA NASS and APHIS data

With the sudden drop in the egg supply, egg prices quickly responded by moving higher. The average price of a dozen eggs in the Midwest increased from $1.86 in March to $2.87 just two months later following the onset of the HPAI outbreak (Figure 5). Since then, prices have remained steady at their highest levels since the 2015 outbreak when the average price eclipsed $3 per dozen. But, if history from 2015 is any guide, the price of eggs should fall quickly as production returns, making the breakfast and baking staple more affordable.

Figure 5: Egg Price Per Dozen (Grade A) – Midwest U.S.

Source: CPI Average Price Data – U.S. Bureau of Labor Statistics

What is your reaction?

Approve
0
Not Sure
0
Disapprove
0

You may also like