(Bloomberg) — Cage-free mandates are adding another kink to egg supply chains tangled by successive outbreaks of avian flu, making it difficult for grocers to restock shelves.
The most recent outbreak of bird flu tore through cage-free chicken facilities, ravaging the supply of so-called specialty eggs. That’s bad news for states that now require eggs in stores to come from cage-free chickens and constricting supply to a market that’s still struggling to emerge from the worst global flu outbreak on record.
“You have now multiple states — California, Massachusetts, Colorado — that can’t use caged eggs,” said John Brunnquell, chief executive officer of Egg Innovations, a major US free-range egg producer. Those eggs are still “very, very tight on supply. And that will not be fixed until those specific cage-free farms get their barns refilled.”
Retail egg prices soared last year as millions of birds were culled to slow the flu’s spread. NielsenIQ data shows that the amount of eggs on store shelves collapsed beginning in November and still hasn’t recovered. With prices at historic highs, supply and demand fundamentals have kicked in and will likely restore some balance — wholesale prices for conventional eggs are starting to fall as sticker shock scares off consumers. However, the lower prices will take time to trickle down to retailers and will take even longer to reach the pockets of consumers who are willing to pay more for eggs from humanely raised chickens.
Read more: Expect some relief from soaring egg prices as US demand softens
As the price for conventionally farmed eggs skyrocketed last year, consumers bought up cage-free and organic eggs that were suddenly relatively cheap. Retailers buy those eggs at a fixed price, so they could keep prices steady for customers even as the cost of a regular dozen soared. But here’s the rub, says Karyn Rispoli, an egg market reporter at Urner Barry, specialty eggs are more difficult to replace.
“Production levels for these types of eggs are far less than conventional and once those pipelines run dry, they can’t be easily refilled.”
By Elizabeth Elkin and Leslie Patton for Bloomberg News (1/13/23)