WattAgNet: Analysis: US egg products market hit hard by avian flu15-05-2015
To date roughly 20 percent of egg laying hens housed to supply the egg products market in the U.S. have been lost to the avian influenza outbreak. Release Date: 2015-05-15 Minnesota and Iowa are the two U.S. states that have suffered the greatest losses in the current avian influenza outbreak, which is already the most damaging in terms of economic and bird losses in U.S. history. Dr. Thomas Elam, economist and president, FarmEcon LLC, said that as of May 14, 2015, the USDA has reported the loss of 27.5 million egg laying hens to the current outbreak. This represents about 9 percent of the U.S. laying hen flock. “Most of those were producing the eggs we eat as table eggs and in bakery products,” he said. “But, some were producing eggs for hatching into replacement layers.” Iowa laying hen losses nearing 50 percent Elam said: “A little simple math tells you that we have lost about 20 percent of our breaking egg supply. I have personally spoken with a baker that is facing a 33 percent production cut if they can’t replace the egg products used to produce their bread.” Other products using eggs include ice cream, candy and mayonnaise. “We can and will divert retail eggs to breaking operations to supply the egg products industry,” he said. Diversion of eggs from the retail market to the egg products market happens routinely in times when there is a relative oversupply of eggs for retail needs. The current avian influenza situation may complicate the movement of eggs, at least initially, to breakers if they are located on inline farms that are affected by the outbreak. Once farms that have been depopulated are confirmed to be free of the virus, movement of eggs onto the premises from other farms would likely be allowed. Elam said that export bans placed on U.S. eggs may help to mitigate the supply situation in the U.S. somewhat. “Exports account for less than 5 percent of egg production (in 2014),” he said. “We will get some of that production diverted to the U.S. market, helping make up some of the losses. It is much too small an amount to make up for all of it. Some companies are starting to look into supply sources outside the U.S., but supplies are limited there as well.” Record high egg and egg product prices ahead “It will take 18 to 24 months to replace the laying hens we have lost. There are just not enough young layers produced every month to speed that up,” he said. “This is a problem that will be with us for a while, even if it stops today.” Elam stressed that his analysis is based on current reported losses and scheduled depopulations, and that while the spread of the current outbreak appears to have slowed, it is not over yet. |