Here’s why ‘eggflation’ might be coming back soon

By Sergio Padilla, CNN

New York (CNN) — A bird flu resurgence sent egg prices through the roof this past year – and it could happen again next year.

As of December 11th, data from the US Department of Agriculture shows that 426 commercial chicken flocks and 586 backyard flocks have tested positive for HPAI in the last 30 days. More than 72.5 million birds have died in 2022 and 2023.

That compares to the last major bird flu outbreak in the US in 2015, which resulted in the death of more than 50 million birds according to a 2016 report by the USDA.

The disease, which is highly contagious among birds, has the potential to kill entire flocks in less than 48 hours, according to the Centers for Disease Control and Prevention and could send chicken and egg prices higher if it crimps supply enough while demand remains high.

Since October, the number of bird deaths has grown. In October 1.37 million birds died, then 8 million in November, and now 4.33 million so far in December.

Cal-Maine Foods, the largest egg producer and distributor in the United States, reported on Tuesday that one of its facilities in Kansas tested positive for HPAI. The company said in a news release that 684,000 laying hens or 1.6% of the company’s total flock tested positive as a result of the outbreak.

Production at the facility has stopped. The company says it is following USDA protocols and shifting production to other facilities. Cal-Maine has not reported outbreaks at any of its other facilities and said it is taking strict protocols to ensure the disease doesn’t spread elsewhere like its nearby complex that houses over one million hens.

Last Thursday, 2.6 million chickens were slaughtered in Hardin County, Ohio, at Trillium Farms as a result of bird flu. That comes less than a month after 1.3 million chickens were slaughtered elsewhere in Ohio, in Union County over another outbreak of bird flu.

Could history repeat itself?

Americans adjusted to prices that got as high as $5.46 per dozen last December. But companies increased inventories to keep up with demand, and egg prices crashed as bird flu instances fell, and the egg industry oversupplied grocery stores.

High prices resulted in sweeping profits for companies like Cal-Maine, prompting criticism and even calls for a Federal Trade Commission probe into alleged price gouging from some Senate Democrats.

Rising bird flu cases causes shortages again, it’s unclear how high prices could go and for how long they may remain high.

Urner Barry’s benchmark Midwest Large eggs increased by 32 cents since Tuesday to $2.10, an increase of 18%. Much of the inspiration behind how egg producers plan their flocks has to do with what demand looks like around the holiday season.

Karyn Rispoli, Egg Analyst and Editor at poultry market intelligence firm Urner Barry said in an email to CNN that demand for eggs rose alongside the Thanksgiving holiday, as is often the case. She noted demand sometimes fluctuates between the holidays but increases closer to Christmas.

Wholesale prices of chicken eggs and eggs for fresh use both spiked in November, rising 58.8% and 71.2%, respectively, according to the Bureau of Labor Statistics’ latest Producer Price Index data released this week. Those monthly increases were some of the largest jumps on record, BLS data shows.

Monthly data, especially commodity data, can be volatile and is frequently revised.

As for why egg producers increased their inventory, its because they are planning flocks around their three strongest demand periods: Easter, Thanksgiving and Christmas.

“People may not think of Thanksgiving and Christmas as an ‘egg holiday’ as they do with Easter, but demand at this time of year is every bit as strong — if not stronger because eggs are a key component in most holiday baking recipes,” said Rispoli.

CNN’s Alicia Wallace and Danielle Wiener-Bronner contributed to this report.

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