Record bird flu outbreaks contribute to surge in egg prices
CEDAR RAPIDS — The doors of Breakfast Barn & Lunch House, a family-owned restaurant that launched last year in northeast Cedar Rapids, open as early as 6:30 a.m. for early risers in search of a morning bite.
Lately, the establishment has had to make some tweaks: Staff hours have been reduced. Military discounts are now temporarily on hold. Cloth napkins will soon transition to cheaper paper napkins. Condiments usually provided free now come at a small price.
The main culprit? Skyrocketing egg prices, coupled with inflation and rising costs of produce.
“It affects us a lot. Any little margin we have on profit, the egg prices are hurting it,” said general manager Gretchen Edson. “Right now, we're just trying to find other areas to minimize our costs so we can make up losses from the hike of the cost of eggs.”
Egg prices fluctuated throughout 2022. But they reached record-breaking highs at the end of December, when wholesale prices surpassed $5.30 per dozen of large eggs in the Midwest and reached $7.50 in California, according to the U.S. Department of Agriculture. Retail prices reflected similar increases, but at higher price points.
What caused these record-breaking egg prices? Experts largely point to last year’s record-breaking outbreaks of deadly bird flu, which wiped out more than 52 million birds across the country as flocks were culled to keep the virus from spreading.
No one was hit harder by the bird flu than Iowa — the top egg-producing state in the nation. And now, the egg industry is desperately trying to recover, sending rippling impacts to consumers’ grocery store receipts and restaurant bills.
“(Iowa has) seen the largest impacts in terms of the number of birds, and that definitely means a big impact in terms of the number of eggs available within the nationwide egg market,” said Iowa State University professor and agricultural economist Chad Hart.
Record-breaking bird flu
Highly pathogenic avian influenza, which refers to highly infectious and deadly strains of bird flu, swept the United States last spring when wild birds migrated north and spread the virus. Infections then had a boomerang during fall migrations back south.
“We were basically trying to rebuild our flocks from the spring outbreak, so sort of a double whammy,” Hart said, noting that it can take two to three months for facilities to recover from an outbreak.
When commercial birds like chickens and turkeys contract bird flu, they almost always die. If an infection is detected, entire flocks can be killed to prevent further spread. Human infections are very rare and typically stem from direct contact with afflicted birds. There is little to no chance of infection from consuming eggs and cooked poultry.
Roughly 16 million birds were culled in Iowa last year between the state’s commercial and backyard chicken and turkey flocks. Two of those flocks contained more than 5 million egg-laying chickens each. And of the 30 known outbreaks, seven occurred in December alone.
The last bout of deadly bird flu in the United States occurred in 2015, costing Iowa's economy $1.2 billion with more than 8,400 jobs lost, according to an Iowa Farm Bureau Federation report. It resulted in the deaths of more than 30 million hens in the state — nearly double the damage seen last year.
But nationally, 7.4 million turkeys and 43 million chickens were killed during the 2015 outbreaks, falling short of the record-breaking losses seen this past year.
“The spring outbreak was similar to what we saw back in 2015, which would have been the last major outbreak here,” Hart said. “Now, you throw on these additional issues in the fall, and this becomes the largest outbreak we've ever seen.”
Egg prices spiked, but starting to decrease
After any bird flu detection, flocks are removed immediately — and for any impacted egg-laying chickens, that means their supply of eggs is gone, too.
As a result, egg prices take the hit. Their record-breaking 2022 high is just starting to decline.
“We've likely seen, hopefully, a peak right now,” Hart said. “Hopefully we will start to bring these prices back down as we start to bring more and more birds back online, meaning more and more eggs entering the market stream.”
Consumer demand is starting to decline from holiday highs, but eggs are still a popular go-to option, especially for those seeking healthier diets in the new year, according to the latest USDA Eggs Markets overview.
“Eggs happen to be one of those basic commodities that everybody continues to buy almost regardless of where prices go,” Hart said, “because it's such a critical ingredient to many of the food products we want to create at home.”
The turkey industry is also facing similar issues, although to a lesser extent, he said. Prices for chicken meat, however, have stayed relatively steady.
Food industry hit hard
Prices of many main ingredients at The Eat Shop, a bakery in Solon, have gone up 20 percent recently. But as egg costs have skyrocketed beyond historical recognition, the bakery has especially felt the burn.
It has resorted to buying egg whites and egg yolks separately and mixing them together — a solution that still is somehow cheaper than a carton of eggs.
“It freaks me out,” said owner Cheryl Maloney about the high egg prices. “We use eggs in, you can imagine, basically everything that we make, so it's been really hard.”
Grocery store visitors may choose to skip pricey eggs as they pass by in the aisle. But food providers that use the commodity to create staple meals are even more impacted by rising costs. Customers may see higher menu prices as a result, Hart said.
“When we're going to those restaurants, typically there's some egg on that plate, so it will impact the cost there as we're looking forward,” he said.
Maloney said her menu prices haven’t increased yet, although she now thinks twice about introducing any new products with eggs in them.
“I'm just crossing my fingers that (prices are) going to come down,” she said.
What will happen next?
One of the biggest unknowns will come in the spring: Will we see more bird flu outbreaks as wild bird migrations begin again?
No one knows. But the egg industry and consumers are likely crossing their fingers for a less eventful year of infections. Limited to no infections could bring retail egg prices down to “normal” — around $0.90 to $1, taking into account inflation that could continue — by early to midsummer, Hart said.
“If you look back, for example, at what we went through in 2015, the idea is it was about a six to seven month process (for the industry to rebuild),” he said. “I would expect a very similar sort of glide path as we're looking forward here.”