Eggs becoming expensive? Here’s why…

If you love your precious eggs in the morning – sunny side up or whisked up into a fluffy omelette du fromage, you might have to pay a little extra for breakfast now. “We have seen a very sharp run up in wholesale egg prices, and now they’re starting to come down,” said Shayle Shagam, a livestock, dairy and poultry analyst at the agency.

He said the wholesale price of New York large shell eggs, the ones he watches to make his forecasts and reports, peaked at $2.49 a dozen on May 29, up from $1.20 a dozen at the beginning of the year. The price stayed at that level until June 9, when it began falling, Mr. Shagam said, and on Tuesday, a dozen eggs was $2.16, a 13.25 percent decline.

However, the U.S.D.A.’s Agricultural Marketing Service said in a report on June 12 “The recent increases in wholesale table egg prices have begun to reverse due to buyer resistance and limited demand,” the U.S.D.A.’s Agricultural Marketing Service said in a report on June 12.

Avian influenza — known informally as avian flu or bird flu — refers to ‘influenza caused by viruses adapted to birds’. The version with the greatest concern is the highly pathogenic avian influenza (HPAI).

While its most highly pathogenic strain (H5N1) had been spreading throughout Asia since 2003, avian influenza reached Europe in 2005, and the Middle East, as well as Africa, the following year. On January 22, 2012, China reported its second human death due to bird flu in a month following other fatalities in Vietnam and Cambodia.

In the USA, HPAI H5 detections began in December 2014 and have continued to date in 2015. USDA is reporting H5 bird flu virus detections in 21 U.S. states (15 states with outbreaks in domestic poultry or captive birds and 6 states with H5 detections in wild birds only).

No human infections with these viruses have been detected at this time, however similar viruses have infected people in other countries and caused serious illness and death in some cases. Human infections with other avian influenza viruses have occurred after close and prolonged contact with infected birds or the excretions/secretions of infected birds (e.g., droppings, oral fluids).

The U.S.D.A. predicts that egg production this year will be down by roughly 341 million dozen, or about 4 percent from last year, Mr. Shagam said. “We do expect to see prices come down from this high but still be at record highs for the year,” he said.

What does that mean? An average wholesale price of $1.60 to $1.66 for a dozen New York large eggs, which would break the record high of $1.42 a dozen set in 2014.

In Texas, the grocery chain H.E.B. is limiting customer purchases to three dozen eggs at a time, but not because H.E.B.’s shoppers were filling their carts with cartons of eggs, Dya Campos, a company spokeswoman, said. Rather, commercial enterprises were coming in to buy eggs out of its refrigerated cases.

“The purpose of the limit is to deter commercial users,” Mrs. Campos said in an email. “We are not a commercial supplier of eggs — our eggs are for Texas families.”

“Egg prices may vary because each store determines the price of their eggs to be competitive in their markets,” Ms. Deering-Hansen said. “Therefore, we don’t have exact numbers on whether there has been a price increase from prior to the avian flu outbreak until now.”

Shop has posted signs in its stores that say, “We’re sorry — due to a national supply shortage, egg prices are rising.” In an email, Amy Hahn, senior vice president for marketing at Stop & Shop, said the company also had distributed “talking points” to stores and representatives to help them explain price increase to customers and address food safety concerns. (The Centers for Disease Control and Prevention says there is no harm to humans in consuming eggs as long as they are cooked appropriately.)

She said she could not say how much prices have risen, because stores set prices.
According to the Agriculture Department, egg prices in stores, however, continued to rise through last week to an average $1.95 a dozen, compared with $1.22 in mid-May.

The agency noted that while grocers are promoting more cage-free and organic eggs by discounting prices, promotions of regular eggs were almost nonexistent, and retailers said egg suppliers had asked them not to promote eggs.

The Agriculture Department also said that there was often a lag between an increase in wholesale prices and one in retail prices, and that retailers may not be passing higher prices on to their customers yet.
Among restaurants, Whataburger announced on June 1 that it was curtailing its breakfast hours because of the impact of the avian flu. But on June 5, the company restored its regular breakfast hours, 11 p.m. to 11 a.m., though items like its Breakfast Platter and Taquito With Cheese were still available with eggs only from 5 to 11 a.m.

“We’re exploring several options to add to our egg supply, including proactively engaging alternative egg suppliers,” the company says on its website.

Phil Lempert, a longtime observer of consumers, food and marketing trends and grocery stores, said other restaurants companies with big breakfast businesses might like to follow Whataburger’s strategy, but could not because of intense competition, especially in the growth market of the breakfast business.

“McDonald’s is having the same problems, I’m sure, but it’s locked in a war with Taco Bell over breakfast — and Taco Bell probably also has challenges,” Mr. Lempert said.

“They just have to swallow the price increases.” He said trends like the Paleo diet, with its emphasis on protein, and the U.S.D.A.’s recent decision to remove limits on cholesterol from its Dietary Guidelines are creating a voracious appetite for eggs.

“We’ve lost 10 to 13 percent of the laying hens in this country, so we’re going to have this period of time where we have less birds and less eggs,” Mr. Lempert said. “That means higher prices.”


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