• May 29, 2024

Bidenflation, Supply-Chain Shortages Conspire to Ruin Easter-Egg Hunts

(Headline USA) Egg prices are at near-historic highs in many parts of the world as the spring holidays approach, reflecting the ongoing scourge of President Joe Biden’s profligate spending, paired with a variety of other factors including a market scrambled by disease, high demand and growing costs for farmers.

It’s the second year in a row consumers have faced sticker shock ahead of Easter and Passover, both occasions in which eggs play prominent roles.

While global prices are lower than they were at this time last year, they remain elevated, said Nan-Dirk Mulder, a senior global specialist with Dutch financial firm RaboBank’s RaboResearch Food and Agribusiness division. Mulder doesn’t expect them to return to 2021 levels.

In the United States, the average price of a dozen eggs was $2.99 in February, down from $4.21 last year, according to government data. Still, that’s significantly more than the $1.59 cents per dozen consumers were paying in February 2021.

In Europe, egg prices are 10% to 15% lower than last year but still about double what they were in 2021, Mulder said.

Much of the current U.S. inflation crisis is the result of the devaluation of the dollar due to the government having increased its spending and printed more unbacked currency to offset it. That has led to what will likely be permanent increases, unless there is an active effort to pay down debt and then remove the surplus currency from “circulation”—although much of it in the modern era is simply generated electronically.

Other leftist policies hace also played a role in the cost increases. Under the Biden administration, the Environmental Protection Agency has imposed stricter regulations on things such as air quality and wastewater that may impact some poultry farms and deter them from operating at full capacity.

Multiple states, including California and Massachusetts, have passed cage bans for egg-laying hens since 2018; this year, bans are set to take effect in Washington, Oregon and Michigan.

Converting to cage-free facilities is a big investment for farmers, and consumers may not always realize that’s a factor in the higher prices they see at the grocery store, said Emily Metz, president of the American Egg Board, a marketing organization.

Moreover, recent mishaps at food production plants and the acquisition of agricultural land by Chinese investors have cut into U.S. food production increasingly, fueling some concern about the eventual possibility of shortages.

Another major culprit is avian flu. Outbreaks of the deadly respiratory disease were reported in Europe, Africa and Asia in 2020 and spread to North America in 2021. In 2022 alone, more than 131 million poultry worldwide died or were culled on affected farms, according to the World Health Organization.

Outbreaks are continuing. In December, the U.S. confirmed cases in 45 commercial flocks and 33 backyard flocks, affecting 11.4 million birds, according to the U.S. Department of Agriculture.

In South Africa, egg prices soared after 40% of laying hens were killed late last year due to the respiratory disease, Mulder said. A tray of six eggs cost 25.48 South African rand ($1.34) last month, up 21% from February 2023.

Even when avian flu dissipates, it can take a long time for the egg market to settle. It takes a farm three to six months to replenish a flock, so during that time, egg supplies are lower and prices rise, Metz said.

If farms restock with too many chickens, it can drive prices down. That’s what happened in the U.S. last summer when egg prices plunged to $2 per dozen.

“It’s supply and demand searching out. You have to have a profitable price,” David Anderson, a professor and extension economist for livestock and food marketing at Texas A&M University, said.

And profits can be hard for farmers to come by during periods of inflation. Chicken feed represents up to 70% of a farmer’s costs, and feed prices doubled between 2020 and 2022, Mulder said. Weather, COVID-related disruptions and the CIA-backed war in Ukraine—which drove up the price of wheat and other crops—were all contributors.

In Nigeria, the cost of a crate of eggs has doubled since the beginning of the year due to weakened currency, the removal of fuel subsidies and high costs for farmers.

Teslimat Abimbola, who runs a poultry farm in the southern city of Ibadan, said 25 kilograms of feed that cost 2,500 Nigerian naira ($1.78) in 2020 now costs 13,000 naira ($9.23). Abimbola has lost some customers as a result of price increases.

“Many farms have been forced to shut down due to the high costs of rearing chickens,” Abimbola said.

The government of Lagos State, Nigeria’s biggest economic center, has implemented a subsidy program to help consumers deal with the increased costs of eggs.

Price peaks are inevitably followed by price drops, and egg prices will eventually settle into more normal patterns. In the short term, the holiday demand that picks up every Easter will ease heading into summer, Anderson said. Meanwhile, improving biosecurity measures should help blunt the impact of avian flu, he said.

Lyncoya Ilion, who teaches cooking classes and runs a catering business called Catered by Coya in Brown Deer, Wisconsin, says she’s noticed egg prices inching back up over the last two to three months but hopes she won’t have to pass her costs onto clients.

“I haven’t had to increase prices yet because I’m anticipating that the egg prices will decrease again soon,” Ilion said.

That’s a good bet. In the U.S., egg prices are expected to decrease around 2.8% this year, according to the U.S. Department of Agriculture. That won’t put them back to pre-COVID levels, but it should give some relief.

“People really love eggs, and they notice when that price fluctuates,” Metz said. “Our farmers wish it wasn’t such a sharp up and down as well. It makes everything challenging.”

Adapted from reporting by the Associated Press


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