Avian Flu, Egg Prices and Ensuring Supply

Egg prices are skyrocketing. A dozen-sized carton easily costs US$5, $8 or even $10­ — that is, if you can find them. With avian flu, known as highly pathogenic avian influenza (HPAI), on the rise, prices might even go higher as eggs become scarcer.

Some grocery store shelves, normally packed with cartons, are empty. Some stores limit the amount of cartons a customer can buy.

Customers with moderate or low household incomes are most impacted, says Sharmah Seakar, MCIPS, senior procurement lead at Efficio, a global procurement and supply chain consultancy. Until recently, eggs have been a relatively inexpensive household staple.

Avian flu affects more than egg prices and grocery store shelves. Poultry farmers are suffering financially and emotionally, having to euthanize chickens infected with the virus. The virus has been reported to have spread to other animals, but the risk to humans remains low. Bakeries and restaurants must contend with higher egg prices or perhaps even a lack of eggs, both of which can cut into profits.

More than 20 billion egg-laying chickens have been culled in the last quarter due to the avian flu outbreak, which began in 2022, Seakar says. According to the U.S. Department of Agriculture, egg production fell to 9.1 billion dozen in 2022, from 9.4 billion dozen in 2019.

The Other Factors

Avian flu, however, isn’t the only cause behind rising egg prices: Increasing production costs and regulatory changes also are impacting prices as well as supply chains, Seakar says.

Poultry farmers have had to contend with rising costs of energy and bird feed, which also have been reflected in egg prices. They also must rebuild their flocks, which can be time-consuming — six to 12 months, he says — and detrimental to the bottom line.

Also contributing to egg prices: Regulations that require the production and sale of cage-free eggs, which often is a consumer preference. Such regulations, which have been enacted by Colorado, California and Washington, among other states, are designed to improve the welfare of the poultry, which can roam freely instead of being kept in small cages, he says. Complying with the laws means egg producers and poultry farmers must invest in new infrastructure, he says.

Managing Avian Flu Outbreaks

As with other supply chain disruption, being proactive rather than reactive can help to mitigate issues before they begin or get out of hand, Seakar says. Technology, preventive measures and more can aid the poultry and egg producer industry in preventing further avian flu outbreaks, he says. These include:

• Implementing biosecurity measures, such as strict hygiene protocols, controlled farm environments and segmentation of hens based on health and risk factors.
• Increasing production of alternate solutions to support consumers, like plant-based egg alternatives. This could help stabilize prices and ensure a consistent supply, he says.
• Manage inventories. Eggs have a reasonable long shelf life: “If you have done a proper fertilization and protection of an egg, it can last for more than three months,” Seakar says.
• Developing new sources and/or sourcing from other regions or countries (be sure to research trade agreements between locales, he recommends).
• Using artificial intelligence (AI) and other technologies to monitor and prevent outbreaks in the poultry industry, which could help stabilize prices in the long run. Abnormal behavior or temperature changes, signaling illness or disease, are among the things that could be monitored, Seakar says.

He explained that implementing AI and other technologies is a one-time investment that can provide long-term benefits, ensuring a consistent supply of eggs.

For buyers, contracts are key, Seakar says.

“Negotiating fixed-price agreements with egg suppliers ensures cost stability and protects against price volatility,” he says. “Including clauses for inflation adjustments and bulk purchasing discounts can maximize savings. Businesses should focus on clear contract terms to hold suppliers accountable and ensure long-term commitments, even during disruptions like force majeure or inflation, through careful planning and risk mitigation strategies.”

Consider building supply chain risk management strategies into contracts, he adds. Another strategy: Include clauses that require suppliers to find alternative sources if they cannot fulfill their obligations.

From a consumer perspective, Seakar suggests trying plant-based egg alternatives to find one you like. Consider it an opportunity to try new foods.

(Photo credit: Getty Images/Gins Wang)