CHICAGO / PARIS, April 14 (Reuters) – Severe outbreaks of bird flu in the US and France are tightening global egg supplies and raising food prices as the war in Ukraine disrupts shipments to Europe and the Middle East.
Higher prices are especially painful for consumers who rely on eggs as a cheap source of protein and a substitute for more expensive meat. Demand jumps around the Easter and Easter holidays in the U.S. and Europe, as families use eggs to bake and color Easter eggs.
Bird flu has wiped out more than 19 million laying chickens on commercial U.S. farms this year in the worst outbreak since 2015, eliminating about 6% of the country’s flock, according to Reuters estimates of federal and state government data. France, meanwhile, is suffering from its worst outbreak ever, with around 8% of laying hens killed. Read more
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Once poultry is infected, entire flocks are killed to contain the disease, which is often spread by wild birds. Read more
The deadly virus and war are the latest challenges for egg suppliers, who are also struggling with labor shortages and high energy and grain costs used for animal feed.
Higher egg prices erode profits for bakeries and food companies struggling with rising costs for flour and other goods. World food prices rose nearly 13% in March to a new record high as the war in Ukraine, a major exporter of wheat and maize, pushed up grain prices, the UN Food and Agriculture Organization said. Read more
Egg prices are expected to remain high, producers said, as it will take months to resume operations on infected farms. Infections also hamper the work of facilities that process shell eggs into products such as dried eggs and liquid eggs used in foods such as cake and pancake mixes and egg sandwiches.
“The product industry is in general panic,” said Marcus Rust, CEO of Rose Acre Farms, the second-largest U.S. egg producer. The company lost about 1.5 million laying chickens on an Iowa farm infected with bird flu, which also set aside a processing plant, he said.
‘EVERYONE IS COMING SHORT’
Iowa, the top U.S. egg-producing state, has struggled with the slaughter of two flocks, each containing more than 5 million laying hens. On Wednesday, Nebraska said a herd of more than 1.7 million laying hens would be killed. The sheer size of such poultry operations accelerated the impact on the US food industry compared to Europe, where farms are smaller.
Wholesale prices for large eggs in the U.S. Midwest peaked at $ 3 per dozen in March, reaching the second-highest level ever, an increase of nearly 200% from a year earlier in the spot market, computer firm Urner Barry said. Prices remained below the record $ 3.09 per dozen set at the start of the COVID-19 pandemic. However, egg products such as liquid whole eggs are at a record high, Urner Barry said.
In France, wholesale prices for shell eggs have risen 69% from last year, said the French agricultural office FranceAgriMer. As a result, consumers could see higher prices for food made with eggs.
“When you produce mayonnaise, it’s quite complicated when egg prices rise,” says Jean-Philippe Puig, CEO of the French food group Avril, which owns the sauce producer Lesieur. “You need to approach supermarkets and convince them to accept a price increase.”
The United States increased imports of eggs from countries including France, Italy and Spain to increase supplies after its worst outbreak of bird flu ever in 2015, according to U.S. government data. Imports are a less viable option now due to outbreaks in Europe, analysts said.
“It’s very much becoming a global problem in terms of the overall shortage,” said Karyn Rispoli, Urner Barry’s egg market reporter. “Unfortunately now all supplies are missing.”
WAR Redirects DEMAND
The outbreak of war, not just disease, is disrupting supply chains for buyers in the Middle East.
Santosh Kumar, who imports eggs for Farzana Trading in the United Arab Emirates, said he has not been aware of shipments from Ukraine to the UAE in the past two weeks. Farzana instead imports eggs from Turkey, he said.
Ukraine produced 14.1 billion eggs in 2021, according to data from Ukraine’s government statistics service. A year earlier, production reached 16.2 billion eggs, more than the 15.7 billion produced in France, the EU’s largest egg producer, according to the French egg industry group CNPO.
In recent years, Ukraine has been the EU’s most important egg supplier and accounts for about half of its imports ahead of the United States.
Middle Eastern countries that bought Ukrainian eggs before the war are trying to find replacement supplies in Europe, said Loic Coulombel, CNPO vice president.
“There is a bird flu problem in France, but also throughout Europe,” he said. “There is no other European country that would have a large amount to compensate for the shortage.”
French food producers are likely to reduce the production of some processed goods or adjust their recipes to cope with high egg prices, said Coulombel, which produces around 1 million eggs in France’s Brittany and Normandy regions.
In Green Bay, Wisconsin, Liz Rehberg, owner of cake and pastry shop The Bakery, said the price of 15 dozen eggs rose to $ 45 from $ 26 in recent weeks. She is considering whether to raise prices or reduce the size of her baked goods.
“You order it just because you need eggs,” Rehberg said. “Then you look at the price and you say, ‘Oh my God.'”
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Reporting by Tom Polansek and Sybille de La Hamaide; Further reporting by Lisa Barrington and Alexander Cornwell in Dubai; Edited by Caroline Stauffer and Lisa Shumaker
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