The price of eggs may increase due to the halting of operations at a Cal-Maine Foods facility in Texas following the detection of avian flu. This development, which led to the “depopulation” of about 1.6 million laying hens and 340,000 pullets, could impact supply and cost, according to poultry expert Maurice Piteski. While it remains uncertain when these impacts may occur, losing less than 1% of the country’s laying hens could affect the supply and demand equation, with the potential for increased prices as a result of this disruption in production. The facility affected by the avian flu infection was substantial, but experts caution against assuming that prices will rise during the period it ceases operations.
David P. Anderson, a livestock economist at Texas A&M University, explained that the facility’s 1.6 million chickens represent less than 1% of the egg laying chickens in the U.S., suggesting that any impact on prices may be minimal. He estimated that prices might increase by around 2 cents per dozen, which may not be noticeable to consumers. Additionally, the U.S. egg market has been producing more eggs than the previous year, with lower feed costs and higher productivity contributing to increased production. Despite the disruption in production, the market is in a better position to withstand potential price fluctuations.
In response to the situation at the Cal-Maine facility, the company reported a decline in sales revenue for the third quarter of fiscal 2024, primarily attributed to decreased egg prices compared to the previous year. The net average selling price per dozen eggs was significantly lower for both conventional and specialty eggs compared to the same period in fiscal 2023. Despite these challenges, market prices moved higher due to the impact of avian flu and normal seasonal fluctuations. The timing of the infection, following the Easter holiday, may help limit the impact on prices moving forward.
Maro Ibarburu, an associate scientist and business analyst at the Egg Industry Center at Iowa State University, noted that demand for eggs typically drops after the Easter holiday. Combined with the relatively small impact on supply and the current market dynamics, the U.S. egg market is expected to remain stable during this time. Cal-Maine Foods, in its financial results released on Tuesday, also acknowledged the decline in sales revenue in the third quarter of fiscal 2024. Market prices experienced sequential increases due to both the recent impact of avian flu and seasonal fluctuations, indicating potential stability in the market despite the challenges faced by the industry.
In conclusion, while the halting of operations at the Cal-Maine Foods facility in Texas due to avian flu detection may lead to disruptions in supply and potential price increases, experts suggest that the impact on prices may be minimal given the size of the facility and the current state of the egg market. Factors such as lower feed costs, increased productivity, and seasonal demand fluctuations also play a role in determining egg prices. It remains to be seen how the industry will navigate through these challenges and how consumers may be affected by any changes in egg prices in the coming months.
