- The USDA announced plans this week for another potential buyout for an agricultural commodity to reduce a surplus — this time eggs.
- USDA will reportedly buy up $11.7 million worth of shell eggs and egg products and distribute them to assist hungry American families, Chad Gregory, president and CEO of the United Egg Producers, said in a statement.
- USDA’s Agricultural Marketing Service said in a notice that a solicitation will be issued in the near future.
This makes the third agriculture-related buyout the USDA has announced this month as it attempts to assist farmers suffering from low margins during a commodity surplus. The USDA already announced a $20 million buyout of 11 million pounds of cheese earlier this week and $11.2 million in financial assistance slated for American dairy producers enrolled in the 2016 Margin Protection Program for Dairy.
The egg surplus currently relates to the bird flu outbreak the food and agriculture industries suffered last year. The outbreak's aftermath significantly reduced egg supplies and sent prices skyrocketing, especially for liquid or breaker eggs that baking manufacturers often use. By January, domestic egg supplies and prices had returned to normal, but as of last month, egg prices had plunged to their lowest in a decade while demand faltered.
Last year's supply and pricing issues drove manufacturers and consumers to use egg alternatives or reduce their egg usage, and that demand has yet to rebound. That's putting a strain on egg farmers but also manufacturers like Post, which also has an egg unit. Post's egg business posted a 12.6% decrease in egg volumes and 15.5% decline in sales for the latest reported quarter, which dragged down overall sales.