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Breaking Some Eggs


As if the general rising cost of everything isn’t enough to deal with, grocers have been forced to pass along higher prices and, in some cases, rationing as the nation’s egg producers grapple with an outbreak of bird flu.

Over the past several months, an outbreak of highly pathogenic avian influenza (also known as AI or bird flu), concentrated in Iowa and Minnesota, has led to tens of millions of bird deaths, and an additional culling of flocks of chickens and turkeys to contain the disease.

According to the U.S. Department of Agriculture (USDA), the number of egg-laying hens decreased by 329 million by the beginning of June, while egg production dipped to 8 billion in May.

As a result, USDA estimates that egg prices will reach a new high in 2015. According to the department’s projections, the average price of a dozen eggs may reach $1.80 by the end of this year, and higher prices may last into early 2016, depending on the the continuing extent of avian influenza around the country.

While most of the cases have been in the Midwest, the impact of avian flu has been felt elsewhere, given that hard-hit Iowa is a top egg-producing state. Other states are preparing scenarios for a possible spread of the disease, and grocery retailers, restaurant operators and manufacturers in around and beyond the Midwest have all felt the squeeze of a tighter-than-usual supply.

Among grocers, San Antonio-based H-E-B is limiting egg purchases at its supermarkets to three cartons per customer during the shortage and it’s expected that other retailers may follow suit.

Meanwhile food manufacturers that produce egg-based products have felt the pinch as well. “We have seen the price of egg-based ingredients significantly increase over the past six weeks” affirms Aldo Cabrini senior director of sales and marketing for Boise Idaho-based J.R. Simplot Co. “We are monitoring the situation and are working both with suppliers as well as retailers to mitigate the impact. So far, we have been able to manage without impact to supply and demand.”

Indeed, many efforts are in place across the food chain to stem the spread of disease, and some of those efforts have already paid off, according to Kevin Burkum, SVP of the Park Ridge, Ill.-based American Egg Board (AEB). “Both the World Organization for Animal Health and Animal and Plant Health Inspection Service have said publicly that the worst of this crisis is behind us, and that the virus will be under control within four months,” he says.

Further, Burkum underscores the point that, while challenging, the situation isn’t yet national in scope and effect. “It’s important to note that no one is predicting widespread shortages of shell eggs at supermarkets, and shoppers won’t be faced with empty egg shelves,” he points out. “The shell egg industry remains largely intact and egg farmers are working hard to service their customers and fill their orders. While prices may have gone up, shoppers are still able to find and consume eggs.”

Additionally, Burkum asserts that consumers remain confident in the egg market. “When AI was first detected in an egg layer flock back in April, the industry was very concerned about potential consumer backlash” he recounts. “Would egg eaters be worried about getting the flu and reduce their egg consumption or, worse yet, stop eating eggs altogether? We’re relieved to say that hasn’t happened.”

According to recent AEB research nearly 80 percent of Americans say that knowing about avian flu doesn’t affect their egg consumption and almost 90 percent believe that eggs are safe to eat.

As well as communicating with consumers the board is helping grocers in affected areas as they share news about avian flu Burkum notes. “We have prepared messaging for egg producers and retailers to help explain the situation,” he says. “This messaging could potentially be used at shelf as well.”

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