US: egg prices drop but recovery to pre-2024 levels remains uncertain
US egg prices, which had surged due to highly pathogenic avian influenza (HPAI) outbreaks, have recently declined. While prices are expected to continue decreasing, the extent of this decrease will be limited, influenced by factors such as feed costs and the recovery rate of the national hen population.
Prices have been so high that there have been recent incidences of egg theft from US stores and restaurants, along with smuggling of cheaper eggs into the US from both Canada and Mexico.
To reduce prices, one state governor recently lifted hen housing restrictions. However, federal action was taken on 26 February, when US Agriculture Secretary Brooke Rollins announced a US$$1 billion plan that includes 5 areas of action.
5-pronged strategy
The first part of the egg price reduction plan is an investment of up to US$500 million in gold-standard biosecurity measures for commercial farms. The US government will also increase relief to aid farmers to accelerate repopulation. Third, the US Department of Agriculture (USDA) is cutting red tape for small farmers and also individuals in order to safely expand small-scale egg production. The fourth part of the plan will fund the exploration of therapeutics, vaccines and more to prevent future HPAI outbreaks or infection severity. The fifth is to explore temporary egg import options.
The plan is working. By 17 March, the USDA reported the cost of a dozen large white eggs had fallen to US$3.45, nearly half the price of 21 January.
In addition, on 19 March, a bill called ‘The lowering egg prices act’ was introduced that would remove the law forcing broiler farmers to discard hundreds of millions of eggs each year due to unneeded refrigeration requirements. The National Chicken Council (NCC) fully supports the bill.
“The bill mirrors the NCC’s petition last month…to reverse or modify a 15-year old regulation that forces the broiler industry to discard perfectly nutritious and safe eggs,” states the NCC.
Further price reduction?
However, Forbes reports that the latest US Consumer Price Index report, World Agricultural Supply and Demand Estimates (WASDE) report, and USDA Agricultural Marketing Service Egg Markets Overview “reveal a market in transition, one that may not return to pre-inflation norms anytime soon”. The high cost of feed is one factor that may keep egg prices high.
However, the USDA expects further egg price drops by summer.
Spotty consumer relief
Meanwhile, some US grocery retailers are lagging in passing on savings to consumers, reports Forbes, “citing concerns over maintaining inventory and potential fluctuations in supply. While the wholesale market is showing relief, retail prices remain unpredictable.”
That is, grocery stores are waiting to see if the drop in wholesale prices will stay steady before they adjust the prices charged to their customers.
Investigation into pricing
On 7 March, the US Department of Justice (DOJ) launched civil antitrust probe into potential price manipulation by egg producers. This follows calls from groups such as anti-monopoly organisation Farm Action for such an investigation.
Politico was informed by 2 unnamed insiders that the DOJ is targeting large egg producers such as Cal-Maine Foods and Rose Acre Farms. Cal-Maine and others were already found guilty of egg price-fixing in 2023, and had to pay a settlement of US$53 million.
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