Urner Barry: US shell egg market remains in “shock” mode

U.S. egg prices have remained at elevated levels for the majority of 2022 due to the country’s highly pathogenic avian influenza (HPAI) outbreak.

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0tvalo | BigStockPhoto.com
0tvalo | BigStockPhoto.com

U.S. egg prices have remained at elevated levels for the majority of 2022 due to the country’s highly pathogenic avian influenza (HPAI) outbreak.

During 2022’s HPAI outbreak, shell egg prices increased more than they did compared to 2015’s outbreak, explained Angel Rubio, Urner Barry Economist, during the Urner Barry Egg Forecast Webinar in December 2022.

“On average, during the 2015 HPAI outbreak, for every 1% increase or decrease in egg layers (depopulated), prices moved nearly 5-8% in the opposite direction,” said Rubio. “For every percent of egg layers lost this year (2022), we have seen a 15-16% price increase, and we haven't seen prices come down yet.”

However, Urner Barry predicts that large midwest egg prices will start to decline in January 2023, even though the industry is expecting the HPAI outbreak to continue into 2023.

According to the USDA Animal and Plant Health Inspection Service (APHIS), 30 flocks totaling 43.3 million table egg layers have been depopulated due to HPAI through December 25 in 2022. The 2014-2015 HPAI outbreak caused the loss of 43 million table egg layers and pullets.

Inflation is affecting the US egg market

Ongoing inflation is causing consumers to look for lower priced protein options.

“Inflation is still hovering around 40-year highs. However, the poultry market is seeing some decreases,” said Andrei Rjedkin, Urner Barry Economist.

Wholesale prices for eggs are high due to the effects of HPAI on the industry. Because the broiler market is not as strongly affected by HPAI as the layer market, chicken prices are slightly decreasing.

“From a retail perspective, eggs are not the lowest priced protein,” said Rubio. “On average, for every 10% change in wholesale prices, retail prices to the consumer move 2% in the same direction. Retail prices usually react within four to eight weeks of changes in wholesale prices.”

“The relationship between wholesale and retail is clear. Costs and savings are passed on to the consumer,” added Rubio.

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