The egg market has experienced increased volatility in pricing with the reemergence of highly pathogenic avian influenza (HPAI). The virus was first redetected in December 2021 in Indiana with a turkey flock but has now spread to various layer farms across the United States. Although producers are taking precautions, market participants fear that the outbreak may rival the impacts of the HPAI outbreak in 2015 that led to a significant supply shock. To better understand the possible effects HPAI may have on the market, we must examine the effects the disease had on price during the 2015 outbreaks.

The 2014-2015 outbreak wiped out more than 50 million chickens and turkeys. With respect to table-egg laying hens, inventories decreased by nearly 12 percent. In 2015, the Midwest large white shell egg quote ranged from $1.11 to $2.88 per dozen — averaging $1.88 per dozen. By comparison, the average price in 2014 was $1.28 per dozen.

Although the outbreak ran from December 2014 through June 2015, much of the impact on price was seen in the spring and summer months. Most layer losses occurred from April to May 2015. Prior to the pandemic, the all-time high was recorded in August 2015. Our findings concluded in a simple elasticity exercise that, on average, a 10 percent decrease in egg layers would increase prices by nearly 60 to 70 percent– all else equal.

Of course, market conditions today are different from that in 2015. In addition to continued COVID complications, the global economy is dealing with the Russia-Ukraine conflict — further disrupting supply chains. At the same time, the HPAI outbreak is occurring during the preparation weeks leading up to Easter. Current shell egg prices have already surpassed the previous outbreak’s highs. Depending on how the industry handles HPAI this time around, consumers may expect additional pressures on shell egg prices — ultimately pushing prices even higher.

The UB Consulting team will continue to monitor the situation and provide updated analysis on the situation.

 Photo Credit: muratart / Shutterstock.com

Andrei Rjedkin
Urner Barry
1-732-240-5330 ext 293
arjedkin@urnerbarry.com

Angel Rubio
Urner Barry
1-732-240-5330
arubio@urnerbarry.com

Akash Pandey
Urner Barry
1-732-240-5330
apandey@urnerbarry.com