WattAgNet: Record egg prices confound egg packaging market tests

Written October 14, 2015 By Terrence O'Keefe
The outbreak of avian flu in the US has reduced the supply of eggs, resulting in high egg prices, which have made retail egg packaging market tests difficult to evaluate.

When conducting a test, whether in the laboratory or in the marketplace, you can learn the most if you can control all factors which can impact the outcome you are trying to measure and varying only one factor at a time. As reported last year, the American Egg Board’s packaging task force conducted retail tests in 2015 on egg cartons that are more informative and have better graphics to see if they can increase egg sales and bring higher prices.

The outbreak of avian influenza in the Upper Midwest that resulted in the loss of more than 40 million layers and pullets has made these retail test markets rather hard to evaluate, according to Kevin Burkum, senior vice president, marketing, American Egg Board. The rapid rise in wholesale and retail egg prices this spring “have created some difficulties in measuring the impact of the egg packaging changes,” he said.

The test markets are still ongoing, it will just take a little longer than expected to gather data that isn’t distorted by a rapid doubling of the price of eggs, and, in some cases, shortages at the retail level.

In the short term, high egg prices are certainly good for egg producers, but high prices also create incentive for substitution. Some foodservice outlets and food processors have increased trials and purchases of egg substitutes or have simply removed eggs or egg products from certain formulations. Egg marketers will have their work cut out for them as the industry’s hen numbers recover. It would be a mistake to assume that demand for eggs and egg products will automatically return to pre-avian flu levels just because the price of eggs comes back to more normal levels.