Bird flu outbreak obliterates flocks, price of eggs continues to rise

As an avian flu infection continues to rip through the Northern Midwest, the price of eggs will steadily rise. The epidemic started in late 2014 in British Columbia before spreading to a backyard flock in the Pacific Northwest. It was never supposed to cross the Rocky Mountains into the the center of the country–where the nation’s egg-laying flocks are based.

But it did.

The infection of the H5N2 strain of the influenza virus has now touched 15 states and at least 174 farms in the United States. In order to stanch the flow of infection, the USDA has ordered an extraordinary measure: all birds near the outbreak, infected and healthy, are to be killed off. This action has resulted in the slaughter of more than 41 million chickens and turkeys.

Post Holdings, Inc., an enormous player in the egg industry, has reported that at least 35% of its holdings have now been touched by avian influenza.

While the Centers for Disease Control reports that there is a very low–but not zero–likelihood that the virus will make the jump to infect humans, the outbreak and the steps taken to contain it have presented their own problems.

First, there is the issue of properly disposing of many millions of carcasses. Farmers and the officials managing the reaction to the outbreak have been clambering to find somewhere  or something to do with all of the dead birds. Mobile incinerators have been brought to those locations with smaller absolute numbers of birds. The Northwest Iowa Area Solid Waste Agency has been managing the dumping of enormous numbers of birds into landfills. At Rembrandt Enterprises alone, 5.5 million birds were killed. Convoys of trucks, some carrying up to 15 tons per vehicle, and response workers in hazardous materials suits have been seen throughout the region.

Men in hazardous materials suits load dead poultry to be buried at Rose Acre Farms Inc., just west of Winterset, Iowa, on May 11. | Image Credit: John Gaps, III/AP.

Furthermore, the sudden paucity of egg-laying hens is making itself known at the market. “We’re talking about an egg price story that’s just beginning to unfold,” Scott Brown, a University of Missouri-Columbia agricultural economist, said. Brown’s comment reflects the uncertainty in how long the infection may persist or where it may spread to next–both factors that will affect the price of eggs.

Officials are stumped as to how the infection has spread thus far. Previous infections have largely been thought to be spread by migratory waterfowl. Ducks, geese, and the like land in a irrigation ditch or hydration pond, which then contaminates nearby farming operations. Other theories have posited that trucking and shipping routes were major vectors for infection. “In the old days, you could track [an outbreak], because it would follow lines of transportation,” said Daniel Shaw, a veterinary pathobiologist at the University of Missouri College of Veterinary Medicine.

But this outbreak does not neatly follow either of these patterns: Somehow the virus crossed the Rockies shortly after the New Year. In early March, the infection hit a flock of 26,000 turkeys in Minnesota.  A week later, H5N2 was reported more than 600 miles away in Missouri.

It is thought that 2015’s erratic winter and long thaw may have prompted more arbitrary migration patterns in waterfowl.

Regardless of the exact route or mechanism of transmission of the virus, the mass-killing of birds has led to a drop in the egg supply, which directly places upward pressure on the price of eggs. The USDA’s weekly Egg Market Report, released on Tuesday, indicates that retailers and wholesalers are paying just over $2 for one dozen large “Grade A, white eggs in cartons.” That’s up more than $.50 since last week.

The Sexy Politico spoke with chefs at two Midwest kitchens this week. One reported a 37% rise in the price of a gross of eggs. The other, who purchases eggs locally from a farm in Michigan, which has not been touched by the outbreak, said that cost had risen only slightly.

The price is expected to continue to rise as warehouse stocks of eggs dwindle in the face of unchanged demand but decreased supply.

For now, commercial and private consumers can expect a 25 to 30% increase in the sale price of eggs as farming operations focus their efforts on rebuilding their flocks. This process may unfold rather quickly, however, since it only takes 4 months for freshly-hatched chick to start laying eggs.

In the meantime, consumers will be spending more money for the same product.