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Bird flu has decimated plenty of poultry flocks in the Midwest, causing a significant spike in wholesale price of eggs. In turn, consumers and businesses find themselves in the situation of having to pay more for the product itself, as well as for the food made with it.
According to the U.S. Department of Agriculture, chicken and turkey producers from Iowa and Minnesota have been the worst-affected by the recent avian flu outbreaks, amounting to more than 44 million birds across the Midwest.
Chris Hurt, a Purdue University agricultural economist, explains that even though this figure sounds like a lot, the nation’s egg-producing capacity hasn’t been critically hit. However, a significant spike in prices was to be expected.
Hurt said that a look at the bigger picture of the egg industry shows why this raid of bird flu hasn’t made such a dent in the chicken and turkey market. These birds are relatively small, and they produce a lot of eggs; for reference, there were 358 million of egg layers reported in the United States in April.
However, the flu-related problems occurring in May had a near-doubling effect in the wholesale price of eggs. Individual consumers aren’t the ones most affected by this change, as the demand for eggs tends to remain the same in spite of price fluctuation.
Hurt said that a significant increase in price was needed in order to bring consumers’ demand back into accord with the expected supply. High-volume buyers and sellers are the ones who feel this price spike the most.
Often when egg costs increase, restaurants, bakeries and other companies using eggs in their prepared food, fail to pass the raised costs they are facing along to consumers. This means that companies are paying more to receive the same gain, cutting pretty deep into the businesses’ already thin margins.
But there are some winners in the situation, too. While egg producers who have lost entire flocks to avian flu will suffer, there are those who still have their healthy flocks – these are the beneficiaries of the price increase.
According to the U.S. Department of Agriculture, warmer weather is expected to reduce the flu’s transmission, as the virus affecting the birds loses power between 65 and 85 degrees. A survey from the Indiana State Board of Animal Health shows that 16 states have reported diagnosed cases.
Indiana’s chicken and turkey industry is the one fearing the outbreak the most, because the state is the nation’s third largest egg producer and turkey producer.
Image Source: Cleveland Blog
