Foods

Egg and turkey prices likely to remain high due to avian influenza: report

Dive Transient:

  • Egg and turkey costs will stay excessive within the wake of this 12 months’s Extremely Pathogenic Avian Influenza (HPAI) outbreak, in keeping with a brand new evaluation from CoBank. Roughly 43.8 million birds have been impacted by the outbreak in industrial and yard flocks all through 39 states, in keeping with the USDA.
  • Egg costs have almost tripled for the reason that starting of the present HPAI outbreak in January, whereas the worth of turkey breast meat has elevated 60%, in keeping with CoBank. The outbreak is impacting home markets greater than the 2014-2015 hen flu, which was the biggest HPAI outbreak in historical past, as a result of provide chain points like feed shortages, the report mentioned.
  • CoBank predicts egg and turkey provides to stay tight and costs to remain greater for longer than the earlier HPAI outbreak, which may set off much less demand as customers grapple with record-high meals inflation.

Dive Perception:

Poultry and egg producers haven’t solely needed to take care of excessive prices for feed this 12 months, but in addition a illness ensuing within the culling of hundreds of thousands of birds.

This 12 months’s outbreak has been closely concentrated in Iowa and surrounding states within the Midwest, in addition to the East Coast, in keeping with USDA information. These are primarily egg and turkey manufacturing areas, CoBank mentioned. 

Egg producers have confronted essentially the most important results of the present outbreak. Based on CoBank, 9.5% of pre-outbreak desk egg-producing flocks have been culled as a result of illness. That is mirrored within the value of desk eggs in business benchmark New York markets, which elevated to over $3.50 per dozen this summer time after beginning the 12 months at $1.20 per dozen, the report mentioned. 

And the present hen flu outbreak is much from over. This week, HPAI was detected in a industrial rooster flock in Ohio believed to belong to egg producer Hillandale Farms, in keeping with native information experiences.

The impression to broiler rooster manufacturing, that are largely concentrated within the South, seems to be minimal, the report mentioned.

Turkey manufacturing has confronted an analogous destiny. Wholesale spot market costs of recent tom breast meat have hit document ranges, growing to $6.50 per pound within the final a number of weeks, CoBank discovered. The report attributes this rise to decrease availability of breast meat from giant turkeys, which producers moved manufacturing from after a weaker 2021 marketplace for the hen, together with labor points within the sector. Round 2.5% of the annual turkey inhabitants has been misplaced as a result of HPAI outbreak, CoBank mentioned.

Meat big Hormel, which owns turkey model Jennie-O, detected hen flu in its flocks earlier this 12 months. Within the firm’s third-quarter 2022 earnings name this month, CFO Jacinth Smiley mentioned Hormel’s turkey quantity declined 20% from the earlier quarter, and the corporate expects a 30% drop for the fourth quarter. Hormel additionally mentioned that the illness had not too long ago been detected once more in a few of its flocks after a earlier outbreak had cooled down in the summertime months.

“Additional, with the optimistic circumstances recognized earlier this week in our provide chain, we anticipate the impression from HPAI to scale back manufacturing quantity in our turkey amenities by way of at the least the top of the primary quarter of fiscal 12 months 2023,” Smiley mentioned.

Whereas the specter of an additional unfold of HPAI has lessened in the summertime months, its results will linger, CoBank mentioned. For instance, after the 2015 outbreak and hen cullings, the egg business noticed a rise in productiveness after which a flattening within the following years.

”We anticipate an analogous trajectory this time, however extra rebuilding efforts might be essential to fill the availability hole within the coming years,” CoBank mentioned. 

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