By Paula Escalada Medrano |
Washington (EFE).- Although the price of many basic products has begun to fall in recent months in the United States, the price of eggs continues unbridled and already accumulates an annual rise of 70%, a situation produced by a perfect storm that is far from clearing
There are three factors that experts point to as responsible: bird flu, the war in Ukraine and general inflation, although some critical voices have called for an investigation into possible price manipulation by large companies.
According to the latest data from the US Office of Economic Analysis, the price of eggs increased 8.5% in January compared to December and accumulates an annual increase of 70.1%. Of all the products analyzed by this body to calculate the Consumer Price Index (CPI), it is the one that rises the most year-on-year, by far.
While other foods have already begun to moderate their prices, that of eggs continues unstoppable and, according to experts, there is still time until it returns to normal.
Thus, when a few months ago a dozen could be found in any supermarket at $3.50, now it is difficult to find it for less than $5 and, in the states most affected by bird flu, such as California, they do not drop below $6.
In a country with an average consumption of 277 eggs per year per person, there has been a perfect storm that prevents its price from falling, despite the fact that inflation (6.4% in January) has chained seven months of falls.
Factors that maintain the price of eggs
For Cornell University professor Harry Kaiser, the “huge outbreak” of bird flu that began last year is the main reason. “More than 57 million laying hens had to be sacrificed, since it is very contagious and requires exterminating all when there is a sick bird,” he told EFE.
The supply of eggs was reduced and “has not yet recovered”, because it is not easy or immediate, since a baby chicken takes between four and six months to lay eggs.
There’s also the war in Ukraine, which has pushed up feed prices and the overall inflation rate, Kaiser says, “putting upward pressure on prices.”
Andrew M. Novakovic, also a professor at Cornell University, explains that the price of agricultural corn changed from $3.50 per bushel (25 kg) in the fall of 2020 to a peak of $7.38 in June 2022.
“Feed costs are the most significant for animal agriculture in general and also energy. Egg production is more affected by this, ”he explains to EFE.
Isaac Arndt, whose family owns a small farm in Glenville, Pennsylvania, knows what applied economics experts are talking about. On the farm they have about 200 laying hens, “nothing compared to the 50,000 or 100,000 that the large producers have per barn.”
Although his farm has not been affected by avian flu, he details that in winter he cannot get the animals -which grow naturally and their egg laying is affected by solar cycles- to produce enough to sell.
That is why in the Washington market where he sells fruit, chicken or jams, he has not brought eggs the afternoon in which this talk with EFE takes place. In the spring, when they are released for sale, they will do so at a price of one dollar higher than what they were selling for until now.
“We will trade them for $6, although we should probably sell them for $8.50 as our costs are up 50%,” he explains. However, he adds, “we can’t do that to the consumer.”
Large stores have not hesitated to do so, a situation that has aroused critical voices such as that of Democratic Senator Jack Reed, who recently asked the Federal Trade Commission to investigate possible price manipulation by large companies.
As prices rise, Reed notes, the largest US egg producer, Cal-Maine Foods (20% of the retail market) reported record profits of $323 million in the last quarter.
In a statement, the company defended itself against these accusations and assured that “the national egg market has always been intensely competitive and highly volatile.”
“Cal-Maine Foods sells its eggs at prices negotiated with each customer. In many cases, the company, and we imagine customers, seek market quotes from independent third parties” and in no case do we “sell eggs directly to consumers or set retail prices,” he argued.
Will it continue to be, therefore, more and more expensive to make an omelette? In Kaiser’s opinion, prices will fall when new layers are incorporated, “the market will correct itself”, as long as no new cases of flu arise and the price of feed falls.
Arndt believes, however, that the story goes long. “Hatcheries are two years behind and it will probably take years for them to catch up.”