Joe Weisenthal, co-host of the Odd Lots podcast, dives into the economic turmoil of rising egg prices, driven largely by the bird flu outbreak. He discusses the emotional toll on small-scale farmers, including the tough decisions around culling livestock. The conversation touches on government interventions, pricing dynamics, and how restaurants are being affected, with some adding surcharges to cope with costs. Weisenthal sheds light on the intricate challenges facing poultry farmers and the broader implications for the economy.
The bird flu outbreak significantly threatens the egg supply chain, causing potential income losses of 30 to 35 percent for farmers.
Egg prices have surged to record highs, driven by bird flu, which complicates market dynamics and impacts consumer behavior and restaurants.
Deep dives
Impact of Bird Flu on Poultry Farming
The recent outbreak of bird flu poses a significant threat to poultry farmers, particularly in the egg-laying sector. Small-scale farmers, such as Jim Hayes from Sapbush Hollow Farm, express grave concerns regarding pandemic-like repercussions on their operations, including the drastic measures that would be necessary if the disease infects their flocks. If disease reaches their flocks, state veterinary officers euthanize affected chickens to contain the outbreak, resulting in potential income losses of 30 to 35 percent for affected farmers. These challenges highlight the sense of urgency for farmers to maintain biosecurity measures to protect their hens from infection.
Egg Price Surge and Market Dynamics
Egg prices have surged to record highs, with recent data indicating that the average price of a dozen eggs exceeded $7. The spike is primarily attributed to the bird flu outbreak, diverging from broader inflation trends affecting various goods. Producers determine egg pricing through contracts with wholesalers, typically set by an egg board, which adds complexity to the market dynamics as farmers may be locked into long-term agreements. This structure means that egg prices may not adjust immediately in response to supply shortages, causing further strain on local markets and consumers who face higher retail prices.
Broader Economic Implications of Egg Price Increases
The rising cost of eggs affects not only consumers but also businesses, particularly in the restaurant sector, where establishments like Waffle House have implemented surcharges on egg dishes. Consumers have shown willingness to bear the increased expense due to awareness of the ongoing bird flu challenges impacting supply chains. This situation underscores the potential for a shift in consumer behavior, where rising prices may force some individuals to buy fewer eggs or seek alternatives. The complex landscape of agricultural economics reflects that high-risk farming operations often yield low returns, complicating the long-term viability of poultry farming amidst these challenges.
The price of eggs was up 15% in January, driving overall inflation higher. The cause? Bird flu.
We’re joined by farmer Jim Hayes, as well as the hosts of Bloomberg’s Odd Lots podcast, Joe Weisenthal and Tracy Alloway, to talk about how bird flu threatens the chicken supply chain and public health — and what, if anything, can be done to lower egg prices.