Egg Prices Reach 10-Year Lows as Production Outpaces Demand

admin | July 22nd, 2016 - 6:08 pm

 

In less than a year, eggs have gone from being an expensive staple at the height of the bird flu crisis to reaching the cheapest prices in a decade due to fully restocked poultry barns.

But the demand for eggs has been stifled because bakeries and companies using powdered eggs in things like pancake mixes learned to cook without as many of them, and countries that stopped accepting eggs from the U.S. last year, including Canada and Mexico, have been slow to resume imports.

People have found ways to reduce their egg usage as an ingredient. They’ve found replacers, they’ve found extenders and they’ve found ways to make certain products with fewer eggs in general.

While wholesale egg prices – a little as 55 cents a dozen in June – are good for grocery shoppers’ pocketbooks, the egg industry itself was caught off guard by the imbalance, according to the agriculture secretary in Iowa, which is the nation’s largest egg-producing state.

The lack of exports hurts the most. Prior to the bird flu outbreak last spring, which led to the deaths of 48 million chickens and turkeys, U.S. egg producers exported as much as 6 percent of their stock. Now, it’s closer to 3 percent.

For two months starting in mid-April 2015, the H5N2 virus ravaged chicken farms in Iowa and wiped out 12 percent of the country’s egg-laying hens. By May 2015, egg production had fallen 28 percent from the previous year and 21 percent in just a month.

Demand, however, remained strong and the scarcity drove prices to record highs: In early August 2015, Midwestern grocery stores paid $2.88 per dozen for large eggs.

The new chickens replacing those that were lost to bird flu are young and producing at their peak. But the glut of eggs means grocers are trying to move eggs off shelves with prices not seen in years and farmers have sent some egg-laying hens to slaughter.

Three weeks ago, wholesale egg prices hit a 10-year low of 55 cents a dozen, and the number of shell eggs available as of Monday was the highest ever seen this time of year. While prices have rebounded to about 98 cents per dozen, it’s likely to dip back into the 50- to 60-cent range in the coming weeks.

The bakery industry was widely affected by the egg scarcity last year. Distributors rationed supply, meaning at times they could get only half of what they needed, forcing them to buy at grocery stores for full retail price.

Source:  northjersey.com, 7-15-2016

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