- Egg and turkey prices will remain high in the wake of this year’s Highly Pathogenic Avian Influenza (HPAI) outbreak, according to a new analysis from CoBank. Roughly 43.8 million birds have been impacted by the outbreak in commercial and backyard flocks throughout 39 states, according to the USDA.
- Egg prices have nearly tripled since the beginning of the current HPAI outbreak in January, while the price of turkey breast meat has increased 60%, according to CoBank. The outbreak is impacting domestic markets more than the 2014-2015 bird flu, which was the largest HPAI outbreak in history, due to supply chain issues like feed shortages, the report said.
- CoBank predicts egg and turkey supplies to remain tight and prices to stay higher for longer than the previous HPAI outbreak, which could trigger less demand as consumers grapple with record-high food inflation.
Poultry and egg producers have not only had to deal with high costs for feed this year, but also a disease resulting in the culling of millions of birds.
This year’s outbreak has been heavily concentrated in Iowa and surrounding states in the Midwest, as well as the East Coast, according to USDA data. These are primarily egg and turkey production areas, CoBank said.
Egg producers have faced the most significant effects of the current outbreak. According to CoBank, 9.5% of pre-outbreak table egg-producing flocks have been culled due to the disease. This is reflected in the price of table eggs in industry benchmark New York markets, which increased to over $3.50 per dozen this summer after starting the year at $1.20 per dozen, the report said.
And the current bird flu outbreak is far from over. This week, HPAI was detected in a commercial chicken flock in Ohio believed to belong to egg producer Hillandale Farms, according to local news reports.
The impact to broiler chicken production, which are mostly concentrated in the South, appears to be minimal, the report said.
Turkey production has faced a similar fate. Wholesale spot market prices of fresh tom breast meat have hit record levels, increasing to $6.50 per pound in the last several weeks, CoBank found. The report attributes this rise to lower availability of breast meat from large turkeys, which producers moved production from after a weaker 2021 market for the bird, along with labor issues in the sector. Around 2.5% of the annual turkey population has been lost due to the HPAI outbreak, CoBank said.
Meat giant Hormel, which owns turkey brand Jennie-O, detected bird flu in its flocks earlier this year. In the company’s third-quarter 2022 earnings call this month, CFO Jacinth Smiley said Hormel’s turkey volume declined 20% from the previous quarter, and the company expects a 30% drop for the fourth quarter. Hormel also said that the disease had recently been detected again in some of its flocks after a previous outbreak had cooled down in the summer months.
“Further, with the positive cases identified earlier this week in our supply chain, we expect the impact from HPAI to reduce production volume in our turkey facilities through at least the end of the first quarter of fiscal year 2023,” Smiley said.
While the threat of a further spread of HPAI has lessened in the summer months, its effects will linger, CoBank said. For example, after the 2015 outbreak and bird cullings, the egg industry saw an increase in productivity and then a flattening in the following years.
”We expect a similar trajectory this time, but additional rebuilding efforts will be necessary to fill the supply gap in the coming years,” CoBank said.