USDA’s new five pronged effort to do something, anything, to control the rampant spread of highly pathogenic avian influenza won’t do much to lower egg prices – at least not during the first half of 2025.
The U.S. Department of Agriculture:
- Wants you to know that it plans to increase Wildlife Biosecurity Assessments on egg farms. The hope is that once educated, egg producers will conform to best practices to reduce the chance of bird flu contamination. Whether the majority of U.S. egg farmers will play along … who knows.
- That it will continue to “indemnify producers whose flocks must be depopulated,” and explore new programs “to aid farmers to accelerate the rate of repopulation.”
- It will “examine strategies to safely expand supply in the commercial market for eggs” and “develop innovative strategies to limit the extent of depopulations in HPAI outbreaks.”
- It pinky swears the agency will be “hyper-focused on a targeted and thoughtful strategy for potential new generation vaccines, therapeutics, and other innovative solutions.”
- It will search far and wide, high and low soliciting “public input on solutions, and will involve Governors, State Departments of Agriculture, state veterinarians, and poultry and dairy farmers on vaccine and therapeutics strategy, logistics, and surveillance.”
The truth? This massive egg salad will have zero impact on egg prices through the first half of the year and likely beyond. USDA pledged $1 billion to reduce bird flu in the U.S. But there is no silver bullet, and the cash won’t solve the issue in the short term.
It all comes down to basic economic supply and demand principles.
Despite crazy-high record retail egg prices, consumers are ponying up their cash. The January Consumer Price Index reported the average price of a dozen Grade A eggs reached $4.95, surpassing the previous record of $4.82 set two years ago. Even more shocking, egg prices increased 15.2% in January – the biggest month-on-month increase in nearly a decade.
And that’s not the half of it. USDA now says it expects egg prices to jump an additional 41% this year.
You would think high egg prices have significantly curbed demand. Not so. USDA reports:
“Grocers continue to limit consumer purchasing to stretch existing supplies, but this has heightened consumer awareness of the egg shortage leading to an increase in opportunity buying, which further reduces available supplies.”
The bottom line is egg demand remains strong for dwindling U.S. supplies. Producers culled 13.2 million birds last December, and at least 26.9 million birds have been culled thus far this year. Egg laying hens are down 3.8% from a year ago and the fewest since January 2016. For a New York minute, USDA wistfully considered somehow formulating a plan to reduce culling in infected flocks. It has since walked that back.
There has been suggestion that the U.S. could import eggs to alleviate the shortage. This is utter nonsense. The Egg Producers Center Union in Turkey wants to lend a hand. The union says it will send the U.S. 420 million eggs this year.
That sounds like a lot. Until you realize that will stock U.S. grocery shelves for about 36 hours. Yup. A day and a half.
If all this isn’t enough, there are a few wild cards that could supercharge egg prices in the weeks ahead. Anyone care to suggest egg demand won’t accelerate during Easter season? And we’re just weeks away from the spring bird migration, potentially bringing who knows what bird flu strains to farms across the U.S.
Even newly minted USDA Secretary Brooke Rollins didn’t sound all that optimistic in announcing USDA’s new strategy: “It’s going to take a while to get through, I think in the next month or two, but hopefully by summer.”
Too much demand. Not enough supply. No solution in sight. Hard boiled facts.
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