Why egg prices are surging — but chicken prices are falling

(Price change) which came first, the chicken or the egg?

Grocery prices are rising the most in decades – and none more so than eggs. However, chicken prices fell in October.

It may seem counterintuitive that egg and chicken prices have moved in opposite directions.

This is largely due to the large outbreak of bird flu in the US – which has killed many egg-laying hens but has largely left farmed hens to produce meat unscathed, according to the economy.

“A lot has happened since 2020,” said Bill Lapp, president of Advanced Economic Solutions, a consulting firm that specializes in food economics. “But the recent rise is unusual in both the shell egg market and the retail egg market.”

Rising egg prices are the cause of the worst avian flu epidemic in the US.

An estimated 50.3 million birds have been affected by the virus since early February 2022, according to the latest data from the Centers for Disease Control and Prevention. These numbers include birds such as turkeys and ducks, too.

Bird flu is rare in the U.S. The last outbreak was in 2015, when 50.5 million birds were affected, the CDC said. The flu didn’t start for a decade or two before that, Lapp said.

Here’s why this is important: Bird flu, which is often carried by wild birds such as ducks and geese, is “highly contagious,” the New Jersey Department of Agriculture warned last month. It is also very deadly; kills 90% to 100% of chickens, usually within 48 hours, according to the CDC.

Farmers often have to cull their remaining birds — not by choice but because of state laws that restrict the spread, said Brian Moscogiuri, global marketing specialist at Eggs Unlimited, an egg retailer in Irvine, California.

As a result, about 37 million egg-laying hens — “layers,” in industry parlance — have died since early 2022, Moscogiuri said. They account for about 10% of US manufacturing, he said.

The egg count has fallen in lockstep. About 8.8 million eggs were produced in September 2022, down from about 9.7 million in December 2021, according to the most recent survey from the US Department of Agriculture.

“It’s a breakdown of things, ‘God-type things’,” said Moscogiuri, who called it “unprecedented.”

“It is a fact that inflation is happening [more broadly] at the same time,” he added.

Bird flu hits during the spring migration season and ends in the summer, experts said. But this year was different; the virus started again in September.

In October, the Department of Agriculture revised the forecast for the production of table eggs down to 2023 and the rest of 2022 following the “September detection” of bird flu.

The outbreak of avian flu — and its death toll for egg-laying hens — is coming closer to a critical season, when consumers use more eggs for holiday cooking, experts said.

Consumer demand for eggs has also been boosted by an increase in expensive protein amid rising food prices, the Department of Agriculture said in an October report.

The higher egg prices “will last until the first quarter of 2023,” Lapp said.

Meanwhile, chicken prices fell in October, down 1.3% on the month.

The average price of chicken breast has fallen below $1.20 a pound, a third of its peak of about $3.60 in the summer, for example, Lapp said.

Chickens that are raised for consumption – known as “broilers” – are not affected by bird flu in the same way as “sections.”

“It’s two very different types of production, two different types of birds,” Moscogiuri said.

The life of a broiler is very short – anywhere from 5.5 to 9 weeks, from hatch to slaughter, according to Vencomatic Group, a poultry consulting company.

However, the life span of an egg-laying hen can be more than 100 weeks, Moscogiuri said. It can take about five to six months for regions to be fully operational, according to the Department of Agriculture.

The latter are more affected by bird flu because farmers have to live longer, experts said.

Broiler production is also up, which is keeping chicken prices low at the grocery store.

For example, about 865 million broiler chicks were hatched in August – 2.9% more than August 2021 and the monthly record, which was already established in March 2020, the Department of Agriculture said.

Broiler “places” also rose in recent weeks, hitting a record of 194.2 million chicks last week Sept. 17, according to the Department. The agency raised its 2023 forecast for “hopeful” hatch and installation.

Despite the recent flight, chicken prices would have risen 14.5% compared to October 2021, according to the CPI. Rising prices of commodities such as corn and soybeans – key ingredients in chicken feed – may have contributed to the rise in chicken prices, as well as eggs. Higher energy prices also lead to higher food prices, for example.