Americans eat a lot of eggs. Over seven billion dozen chicken eggs a year to be precise, give or take a few ten million dozen or so. That means eggs are big business in the U.S. When a new strain of avian flu knocks out more than 5% of the total egg production in just a few months resulting in an egg shortage, you can bet prices are going to soar.
Related to this, the U.S. Department of Agriculture reported that as of June 1st, Midwest egg prices had shot up 120% from mid-April to $2.62 per dozen.
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Moreover, restaurants across the country are struggling to come to terms with higher egg prices and an egg shortage caused by a bird flu virus that wiped out millions of chickens on farms in many areas of the country this spring. Restaurants are being forced to pull egg dishes off their menus or raise prices until the supply returns back to normal.
More on avian flu
Avian flu (or bird flu) is an influenza type A virus that varies based on two subtypes – haemagglutinin (H) and neuraminidase (N). There are 16 haemagglutinin and 9 neuraminidase subtypes of influenza A virus, which means there are hundreds of variations of avian flu. All HN combinations may be found in wild aquatic birds, while H1, H2 and H3 are also in human populations.
The form of avian flu that is currently ravaging U.S. poultry farms is known as H5N2, and has killed tens of millions of domestic birds and probably tens of thousands of wild birds.
The H5N2 avian flu viruses detected in the United States are similar to H5N2 viruses initially found in early December 2014 on poultry farms in Canada. .No human cases of infection have been associated with either the North American or the Eurasian lineages of H5N2 viruses
Influenza A (H5N2) virus is highly contagious among birds and carries a high mortality rate. The H5N2 avian flu virus began showing up in Midwest commercial turkey and chicken farms this spring. More than 48 million turkeys and chickens have died or been killed to prevent the virus from spreading.
Authorities note that the frequency of new cases has slowed dramatically in most states, though agriculture officials reported just a few days ago that an Iowa chicken farm with over one million egg-laying hens tested positive for H5N2 avian flu..
Soaring prices due to egg shortage
Given the culling going on at chicken farms, the USDA has reduced its forecast for table egg production this year to just 6.9 billion dozen. That represents a 5.3% decrease from from 2014 production. By the end of May, the price for a dozen Midwest large eggs had skyrocketed 120% from their pre-bird flu prices just three months ago to $2.62, according to poultry sector analyst Urner Barry.
Of note, table egg prices did finally start to come down late last week, but it could be up to two years before the industry returns to normal production.
“The best-case scenario, we’re talking about a year before the availability is more robust,” noted John Howeth, the American Egg Board’s senior vice president in charge of food service and egg product marketing.
Restaurants suffering negative impact
Restaurants throughout the country, especially those that specialize in breakfast, have been seeing significantly higher costs in the last few weeks.
“Our contracts have been nullified until this is cleared up and the supply gets back on track,” explained Amy Rhoads, vice president of licensing and human relations for firm that owns Colorado-based Le Peep restaurants, which operate 54 restaurants across 12 states.
The problem is that nearly every item on the Le Peep menu has at least some eggs in it. However, that is definitely not going to change, Rhoads said, because eggs are “so much a part of who and what we are.” She did comment that the egg shortage is boosting food costs significantly, and as a result, the restaurants are being forced to raise their prices to try and make up the extra costs.
According to Rhoads, it’s really the uncertainty of how long the shortage will last that is most troubling to restaurant owners. “It’s one of those things that, when you don’t know how bad it’s going to get or when the end is in sight,” she says.