The egg supply has completely recovered from the impact it suffered due to the highly pathogenic avian influenza (HPAI) outbreak in 2015, surprising industry analysts. Initial forecasts had predicted an 18-month timeline for flocks and the supply to return to pre-HPAI levels, yet producers have achieved this goal in one year’s time.
Prices for both shell eggs and egg ingredients reflect this abundant supply and overall lackluster demand, however. In fact, according to Urner Barry analyst Rick Brown, whole egg prices are at a 10-year low.
Urner Barry analyst Brian Moscogiuri said retail has actually been better than expected, by most accounts, since egg prices hit those lows.
“Cheap wholesale costs have allowed retailers to feature at and below the dollar mark for large dozens,” Moscogiuri said. “Many of these accounts are struggling to make up for year-over-year sales dollars at the egg case, and their only hope has been to increase volume. In many cases, that would mean they’d need to sell as much as three times the amount of eggs by volume!”
Egg processors were affected the most by HPAI as the majority of birds lost were producing for the products arena.
“Though egg product outputs have fully recovered, demand has been slow to return,” Moscogiuri noted. “Replacers, extenders and general reductions, especially in the manufacturing sector, leave finished inventories mounting at a number of plants across the country.”
The dried whites category was affected the most; inventories are nearing 10 million lb., and prices are down 86% from the highs seen last year, he added.
Even with some of the lowest shell egg and egg product prices in history, international demand for U.S. egg and egg products has also taken a hit. The U.S. has been slow to recapture lost export opportunities, Mosgiuri said.
Although there are fewer layers in production and retail demand is better than expected, he said egg product usage destruction domestically and disappointing international business are hindering the market’s ability to get back to pre-HPAI norms.
According to the American Egg Board (AEB), new biosecurity safeguards and measures will help ensure the protection of a healthy and viable egg industry. Affected farms worked diligently to meet the stringent cleaning and disinfection regulations defined by the U.S. Department of Agriculture's Animal & Plant Health Inspection Service before repopulating.
“With information gleaned from last year’s historic outbreak of avian influenza, the industry and individual producers have instituted policies and practices designed to stabilize the egg supply now and in the future,” said John Howeth, AEB senior vice president, foodservice and egg product marketing.
Moving forward, manufacturers can count on an ample supply of the complete range of egg ingredients, which is especially important heading into the fall and holiday baking season, Howeth said.
In addition, he emphasized that “companies can rely upon the egg industry for safe ingredients. All further-processed egg products designed for use as ingredients are pasteurized. The safety record has remained unbroken for more than 40 years, without a single recorded instance of salmonellosis linked to further-processed, pasteurized egg products.”