The relief from sky-high egg prices may be starting to crack. 

Cal-Maine Foods, the largest egg producer in the country, on Tuesday reported that a Kansas facility had an avian flu outbreak affecting approximately 1.6% of the company’s total flock, or about 684,000 laying hens. Meanwhile, data from the U.S. Department of Agriculture shows dozens of commerical flocks have been hit hard by the virus in recent months. 

The latest bird flu outbreak has stirred concerns that egg prices – which had finally started to settle after reaching nearly $5.50 per dozen late last year – may start spiking again. 

“Seemingly every day there is another announced infection site, which not only physically reduces the actual number of egg layers, but also casts a negative psychology over the entire egg market,” Kevin Bergquist, Wells Fargo Agri-Food Institute Sector Manager, said in a written statement. “The reaction to supply stress is price increase.”

Is there another avian flu spike?

More than 72.5 million birds have been killed so far in 2022 and 2023 to stem the spread of the virus, according to the U.S. Department of Agriculture. 

After a lull in infections, the agency's data shows we’re in the midst of a fall spike. The number of birds killed has risen from 1.4 million in October to 8 million in November and more than 4 million in the first few days of December.

The virus “is expanding at a very similar pace to the previous major outbreak, so it is serious,” Bergquist from Wells Fargo said. He described the current virus mutation as “one of the more virulent and contagious, which is not good for the entire poultry industry.”

Some of the chickens at Hickman's Family Farms. The egg producer with more than 3 million hens in Tonopah and more than 4 million in Arlington. Hickman

The migration of wild birds is likely the cause of the most recent spike.

"They're often mixing with other birds and allowing for that amplification, ping-ponging of the virus to occur,” said University of Minnesota School of Public Health Professor Jeff Bender. “Then, (it’s) spilling over into those very susceptible birds like our turkeys and chickens.”

Why your 401(k) is happy:Dow hit new record Wednesday, and stocks are still climbing

Why are egg prices going back up?

Federal data shows egg prices have dipped more than 22% over the past year as egg producers worked on rebuilding their egg supply. A USDA report released earlier this week quotes combined regional large egg wholesale prices at $2.06 per dozen – close to the three-year average but far below last year's prices. 

Egg prices were already expected to tick up this winter due to seasonal demand, and the spike in avian flu infections could compound those price hikes.  

“Christmas is one of the times where egg consumption goes up for holiday meals, the eggnog and all that kind of stuff,” said Yuko Sato, a poultry extension veterinarian and diagnostic pathologist at Iowa State. “So naturally, every year, the egg prices go up during Christmas time or holiday season.”

But it’s unlikely we’ll see prices spike as high as they did in 2022 since the egg inventory has rebounded, according to Dennis Brothers, associate extension professor at Auburn University’s agricultural economics and rural sociology department.

“I don't think we'll see a price spike in the real near future. At least nothing like we saw last year,” he said. “Prices are going to go up, of course, because of seasonal demand, and this will start restricting inventory some. But we’ve got a lot of eggs on hand right now.”

Bergquist also doesn’t anticipate wholesale egg prices to jump to the levels we saw in late 2022, but he does expect higher wholesale egg prices in the near term.

“As more HPAI (avian flu) infection incidents are announced, the egg market will likely react with higher prices,” he said. 

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.