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The Wall Street Journal: Egg prices jump as bird flu hits U.S. poultry flocks

A rapidly escalating bird-flu outbreak in the U.S. is contributing to a surge in egg prices and threatens to raise prices on other poultry products in the coming months as deaths continue to mount.

Cases of highly pathogenic avian influenza so far have led to the deaths of more than 17 million birds, according to Agriculture Department data. The virus outbreak, the worst in seven years, is hitting Midwest egg-laying flocks and affecting companies from Tyson Foods Inc.
TSN,
+1.57%

to Hormel Foods Corp.
HRL,
+1.71%

More than 11 million egg-laying chickens, roughly 3% of the total U.S. flock, have died or been destroyed as a result of the disease, along with more than two million commercially raised turkeys.

Shell egg prices have climbed to $2.88 a dozen, up about 52% since Feb. 8, when the USDA confirmed the first case in a U.S. commercial turkey flock in Indiana. It is their highest point since the start of the pandemic in March 2020, according to market research firm Urner Barry.

Prices are being driven higher by the disease’s spread and the coming Easter holiday, when demand for eggs is high, analysts said. Industry officials aren’t expecting any shortages, but analysts said retailers are buying up eggs in anticipation that supplies could tighten in the coming weeks.

“Egg availability heading into Easter is sure to be hampered,” said Brian Earnest, an animal protein economist at CoBank. The U.S. supply of table egg-laying chickens is down from more than 340 million in April 2019 to about 322 million in February, he estimated.

As a result, companies like Cal-Maine Inc.
CALM,
+6.30%
,
the largest U.S. egg producer by sales, are poised to see higher egg prices for the rest of the year as a result of the tighter market, said analysts at Stephens Inc. Cal-Maine said Wednesday that it hasn’t had any cases at company-owned or contracted production facilities to date.

Dozens of bird-flu cases have been reported across the U.S. in the past two months, with cases ranging from Maryland to South Dakota. The disease was confirmed by the USDA in five new U.S. states Wednesday.

The bird-flu outbreak comes as food prices are already on the rise, with food makers paying more for fuel, ingredients and labor. Analysts said it can be difficult to pinpoint how much prices of certain protein products have been affected by the bird flu because of other inflationary pressures. The war between two grain-producing powers, Russia and Ukraine, is further inflating meat prices as producers rely heavily on grain to feed livestock and poultry.

The U.S. poultry industry had remained largely unaffected by avian influenza since the 2015 outbreak that led to the deaths of more than 50 million chickens and turkeys, the largest ever recorded in the U.S. Since then, chicken, turkey and egg processors invested in new biosecurity measures and other precautions. Officials said the increased measures give them confidence they can mitigate the spread, but this year’s outbreak has been hard to predict.

An expanded version of this story appears on WSJ.com.

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