Get ready for an "eggs-pensive" summer. The U.S. Department of Agriculture (USDA) now says the wholesale price of large shell eggs in New York have risen from $1.18 to $2.13—nearly a dollar from May 1 to May 21. While “breaker” eggs—the kind sold in liquid form to restaurants like McDonald’s Corp.(NYSE:MCD) have risen from $0.75 to $2.04 in Central States.
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Egg prices are surging a month after the bird flu was first detected in a chicken flock in Iowa, the nation's leading egg producer.
“Over a third of our layers have been affected by avian influenza. Clearly this will have some impact on prices, both on the shell eggs you see in the store and on processed eggs, such as liquid and dried, that are an ingredient in other products,” said Bill Northey, Iowa’s Secretary of Agriculture.
Iowa lost 40% of its laying hens and has been the hardest hit by the avian flu. The state produces about 15 billion eggs a year.
But according to a new report from the National Agricultural Statistic Service (NASS), the number of eggs hatched during the month of April totaled 49.6 million, up from 9 percent from last year. Eggs in incubators totaled 48 million on May 1, up 1 percent from a year ago. And, overall egg production in the United States is up slightly from last year, totaling 8.21 billion.
The USDA previously forecasted egg prices to be below average than last year. According to a May 12th report, egg prices averaged $1.23-$1.127 per dozen in the second quarter of 2015, $1.16-$1.24 in the third quarter and $1.33-$1.45 in the fourth quarter. This compares to prices of $1.35, $1.29 and $1.63 in the second, third, and fourth quarters of 2014, respectively.
Though prices have increased, Northey says it’s still too early to tell the full impact for consumers.
But big food corporations who rely heavily on eggs are already anticipating an increase of cost.
In a statement sent to FOXBusiness.com, Dunkin Donuts (DNKN) said: "We are continuing to closely monitor with our supply chain partners the recent avian influenza outbreak and resulting effects upon the egg supply in the United States. At this stage, it is too early to determine any specific impact upon Dunkin’ Donuts’ product inventory or pricing. Given the current situation, we do anticipate an increase in the cost of eggs due to the shortage. Ultimately, any pricing decisions on products in our restaurants are made by our individual franchisees as they determine what is best for their business.”
But this isn’t the first epidemic to impact our shores. A major epidemic of highly pathogenic avian influenza (HPAI) occurred in the United States in 1983-84. It took more than 2 years to eradicate, at a cost of more than 70 million dollars. Approximately 17 million birds had to be destroyed and it caused a 12% change in egg prices.
Some countries have stopped imports of eggs from the U.S entirely, while other countries have restricted imports from the affected states, but are still importing eggs from states without HPAI. In 2014, the U.S. exported approximately 5% of the eggs it produced.
“I do think it is important to remind all customers that there has been no human health impact from this disease and eggs, turkey and chicken are safe to eat,” said Northey.