With the worst ever U.S. outbreak of bird flu leaving almost 45 million dead chickens and turkeys, egg costs are climbing to records.
Prices for wholesale consumer-grade eggs, sold in grocery stores, more than doubled in the past month to reach an all-time high on Tuesday, according to commodity researcher Urner Barry, which has been tracking the industry since 1858.
More than 10 percent of the country’s laying hens have been wiped out by the spread of avian influenza across the Midwest. Iowa, the top U.S. egg producer, was hardest hit. Prices for breaker eggs -- those cracked and sold in liquid form for use by industrial food manufacturersm wholesale bakers and restaurants -- started reaching records last month. To make up for supply losses, buyers are snapping up consumer-grade fresh eggs, normally sold in cartons to shoppers, and driving costs higher.
“Some of the buyers caught on contracts, they bought up all availability of shell eggs domestically,” Brian Moscogiuri, an egg-market reporter at Bayville, New Jersey-based Urner Barry, said in a telephone interview. “It lifted all ships in the egg sector. They needed any and all eggs they could get their hands on, and they were willing to pay for them.”
Wholesale consumer-grade eggs increased 120 percent from a low on May 4 to a record $2.62 a dozen on Tuesday, Urner Barry data show. At the same, costs for breaker eggs have nearly quadrupled to an all-time high of $2.35.
U.S. consumers will probably pay $7.5 billion to $8 billion more to buy eggs, an increase of at least 75 percent from last year, Goldman Sachs Group Inc. analysts including Jason English wrote in a report on May 20. Post Holdings Inc. has warned that bird flu will hurt fiscal 2015 earnings at its food-service unit while countries in the Middle East and Asia have restricted American poultry shipments.
Domestic egg production is expected to fall in 2015 for the first time since 2008, according to the U.S. Department of Agriculture. It will take 18 months to two years to replenish the country’s flock of laying hens, according to Maro Ibarburu, an analyst at the Egg Industry Center in Ames, Iowa. American consumers will eat 260 eggs per person this year, on average, the USDA forecasts.
There aren’t enough cinnamon rolls, pancakes and scrambled eggs to go around at Whataburger, a restaurant chain with more than 770 restaurants in 10 states. The San Antonio, Texas-based company said Sunday it will trim breakfast hours because eggs are so difficult to come by.
At Challenge Dairy, which has 65 trucks delivering to restaurants, hotels and food manufacturers around California, supplies of breaker eggs could drop to as little as 25 percent of the usual supply by mid-summer, according to Tom Ditto, a vice president of foodservice.
“The restaurateur that is buying a few cases of liquid eggs and pouring it into the skillets, he’ll have to buy more fresh eggs, and crack them by hand,” Ditto said by telephone on June 2 from Dublin, California. “There are going to be shell eggs, but the price is going to go through the roof.”