High demand, bird flu are scrambling the egg supply chain

David Maloni has worked in food supply-chain data analysis for more than a quarter century. But he has never seen a situation with eggs quite like the one playing out across the country right now.

A nationwide egg shortage sparked by a deadly avian influenza outbreak is causing empty shelves and soaring prices, prompting some grocers to limit the number of eggs shoppers can purchase.

“I don’t know if we’ve ever seen prices like this before,” said Maloni, who is a commodity and food supply-chain consultant and president of Sarasota, Florida-based Datum FS. “It’s pretty crazy.”

Egg prices were up more than 225% in December over the year before, surging from $1.47 for a dozen large eggs in 2021 to $4.79 a dozen 12 months later. Overall food-at-home prices were up 12% in November, according to federal data. December’s Consumer Price Index numbers are slated to be released Thursday.

The high prices were fueled by soaring demand for eggs for holiday baking, a normal seasonal fluctuation that was magnified by the impact of the bird flu outbreak.

As of Tuesday, 57.8 million animals are known to have been infected with highly pathogenic avian influenza (HPAI) viruses since January 2022, according to the Centers for Disease Control and Prevention. That includes 728 reported outbreaks among wild aquatic birds, commercial poultry and backyard or hobbyist flocks in 47 states, the agency said.

Egg-laying chickens have made up the majority of the birds slaughtered in an attempt to slow the spread of the virus.

Those outbreaks have stalled fall egg production by about 5% compared with the same period last year, Maloni said.

“It’s at a time when we have our biggest seasonal increase in demand,” he said.

Egg supply headaches have been especially severe in Colorado, where a state law that went into effect Jan. 1 requires all locally raised chickens to be cage-free if the eggs will be sold in stores. The law is being phased in and will be fully implemented by 2025.

According to local reports around the country, a number of grocers are limiting egg purchases to two cartons per customer, including Fred Meyer in Anchorage, Alaska, and a Whole Foods Market in Denver.

The egg shelves were nearly bare at a Target store on the Northwest Side of Chicago earlier this week, with the few cartons of organic eggs available selling for $7.99 a dozen.

A Walmart spokesperson told WGB that the retail giant had not imposed any egg purchase limits, despite ongoing supply chain challenges.

“Higher demand leading up to the holidays and the impact of avian flu caused tighter supply,” the spokesperson said. “However, now demand has returned to normal levels.”

There are some reasons for sunny side-up optimism in the egg pipeline, Maloni said.

The United States Department of Agriculture is forecasting egg production in 2023 to be about 5% higher than the year before and about 2% higher than it was in 2021 and 2020, he noted.

“That’s good if we can get there,” Maloni said. “That’s good but it’s probably not good enough.”

With the holiday season over, demand for eggs will slow. And so too should prices.

“Typically, some of the highest prices will be in December, and then the market will come off about 10% to 20% in January compared to December,” he said. “I think the highest prices hopefully are behind us.”

Egg supply, however, is another story.

“It’s going to take a little while for it to recover,” he said. “We should see some of that seasonal decline, but it’s going to take a while for supplies to normalize.”