Wholesale egg prices in the U.S. doubled recently in response to increased retail demand for shell eggs as consumers stocked up to prepare for the new coronavirus (COVID-19) pandemic. The initial surge of panic buying by consumers will subside and the supply chain for eggs and egg products will adjust to increased demand for shell eggs and less egg products demand for as long as foodservice operations are curtailed. I don’t think U.S. egg producers can count on a sustained increase in total demand for eggs.
The percentage of eggs and egg products sold at retail that are cage free is less than the percentage of cage-free egg and egg products going into foodservice. Expect the shift to more retail eggs sales will “pump the brakes” on the U.S. egg industry’s shift to cage-free production.
During the current pandemic, more consumers – some of whom will be first time users – will utilize home delivery options for groceries and prepared meals. Expect some of these new users of delivery services to develop a preference for these services and stick with them when the pandemic ends.
Consumers will go back to dining out when restaurants reopen, but expect the recovery of restaurant sales to be slow after an initial surge due to consumers’ desire to rid themselves of “cabin fever.” Economic activity may slow enough during the pandemic to push the U.S. economy into a recession. Even if the economy avoids falling to recession territory, it is likely that consumers will be more conservative with purchases and this would negatively impact spending on meals away from home. During the last U.S. recession, total restaurant spending fell, and white tablecloth restaurants were hardest hit while quick-service restaurants fared significantly better. Think less eggs Benedict and more Egg McMuffins.
