The US egg market is recovering well, but will avian flu have a longer-term impact on industrial egg use?
Rick Brown, senior vice president at Urner Barry, which tracks egg industry data, told FoodNavigator-USA: “We estimate that egg product usage is still down anything from 15-25% [from pre-avian flu levels]."
A lot of food manufacturers that reduced or replaced eggs during the outbreak have reverted – or will revert - to their original recipes, but some that reduced eggs a little in formulations without any major problems may decide to stick with the new recipes, he said.
Likewise, if packaged food companies have changed recipes and labels to accommodate egg replacers, they may decide to wait a little longer before reverting back to eggs or simply stick with their egg replacers, because “changing everything again is a hassle”, he said.
“It depends who you speak to, I’ve spoken to some manufacturers that will go back to their old recipes because the reformulated ones [with less or no egg] frankly just don’t taste as good, so we’ll just have to see what happens in the next few months.
"Some manufacturers have also been waiting to see if there would be another outbreak with the fall migration before switching recipes back again.”
Egg prices: There’s been an overcorrection
So what’s happening with egg prices?
The wholesale price of 12 breaker eggs (shell eggs designated for breaking to produce egg products that food manufacturers use such as liquid egg) peaked at $2.37 on August 5, 2015 at the height of the outbreak, and is now down at 53 cents, which is well below the five-year average of 83 cents, said Barry.
“We’re seeing a bit of an overcorrection, as prices came down significantly as supply increased [as repopulation of affected farms began, unaffected farms increased production, exports decreased and imports increased] but demand was lower [as prices had originally gone up and firms had changed recipes and menus].”
Egg supplies
Asked about the egg laying hen population, he said: “We’re now up to about 282m egg laying hens compared with a low of 270m at the peak of the outbreak and a high of 310m in December 2014 [the five-year average is 295m].”
Imports of shell eggs from Europe, meanwhile, have slowed down from 150 containers/week at their peak last year to 83 containers in the week ending December 28, 2015, with the number likely to drop further as domestic prices are now lower than they are in Europe, he said.
According to John Howeth, executive vice president at the American Egg Board, if the recovery continues at the current rate, by midyear 2016 the flocks should be at or near 100% pre-outbreak levels.
“As the supply of egg products continues to recover, there will be ample availability for use in the food industry,” he added. “And barring any further incidents, we expect supply and pricing to regain their previous consistency.”
American Bakers Association: This taught the industry that we cannot take our ingredient supplies for granted
So how are bakers - key users of egg products - feeling now the dust has settled?
Good, said Cory Martin, director, government relations, at the American Bakers Association. But not complacent.
“Bakers and other food producers are still on pins and needles as the industry will not easily forget the lessons learned from the drastic supply disruptions that occurred last spring.
“This experience has mainly taught the industry that we cannot take our ingredient supplies for granted – we must do more to decrease risk and avoid finding ourselves in a similar situation as we did in spring 2015.”
That said, he added: “The good news is that most (if not all) of the farms affected by avian flu in the Midwest are back in operation. While it will take some time to get back to full production, the fact that they are up and running now is very promising for future supply. Also, while most expected the AI to return this fall and winter in the US it has not yet happened (and hopefully will not).
“The U.S. Department of Agriculture has approved vaccines for hens, but these vaccines have not been used since the AI has not returned. Also, egg producers have been following critical safety measures to prevent the spread of any sickness within their flocks. In short, the US is much better prepared to fight another outbreak of AI than it last spring should it make a return this year.”
