As Easter approaches, many consumers are keeping a close eye on egg prices. The cost of a dozen eggs has increased dramatically since the outbreak of highly pathogenic avian influenza (HPAI) in commercial flocks. The rollercoaster ride of egg prices, influenced by supply disruptions, has left many wondering if they'll be paying more for their Easter eggs this year. But is there hope on the horizon?

Let's delve into the data and assess the current situation.

The HPAI Effect: A Timeline of Egg Price Volatility

Data from the U.S. Bureau of Labor Statistics, retrieved from the Federal Reserve Bank of St. Louis (FRED), paints a clear picture of the impact of the HPAI outbreak on egg prices. Starting in early 2022, coinciding with the USDA’s confirmation of HPAI in commercial flocks, egg prices surged dramatically. The reduction in supply led to a peak in prices in January 2023, putting a strain on consumers' wallets.

There was a glimmer of hope in August, as prices began to near pre-outbreak levels, but unfortunately, this relief was short-lived, as prices have once again started to climb.

Understanding the Economic Landscape of Egg Production

The health of the 368.2 million egg-laying chickens in the United States and their ability to supply eggs is a critical factor. To grasp the broader implications, we turn to IMPLAN data, which sheds light on the economic footprint of egg production in the United States. Here are some key insights:

Top Producing States: Iowa, Indiana, Pennsylvania, Ohio and California are the top 5 chicken egg producers in the US in terms of Wage & Salary Employment (as of 2022). 

Economic Contribution: In 2022, chicken egg production contributed around $21 billion in income for over 300 thousand Americans and added approximately $39.5 billion to the US GDP.

Beyond Egg Producers: A Diverse Economic Impact

Chicken egg production makes up nearly 50% of the poultry and egg industry. Using the ratio of number of employees at the 6-digit NAICS level in chicken egg production compared to the poultry and egg industry overall, we analyzed the economic contribution from the chicken egg portion of the industry. 

Top 5 Industries (by Total Employment):
- Poultry and egg production (64,407 jobs)
- Support activities for agriculture and forestry (25,510 jobs)
- Wholesale - Other nondurable goods merchant wholesalers (17,990 jobs)
- Grain farming (15,031 jobs)
- Other real estate (12,939 jobs)

Top 5 Occupations (by Wage & Salary Employment):
- Miscellaneous Agricultural Workers (27,976 jobs)
- Laborers and Material Movers (16,008 jobs)
- Driver/Sales Workers and Truck Drivers (13,993 jobs)
- General and Operations Managers (5,679 jobs)
- Sales Representatives, Wholesale and Manufacturing (5,232 jobs)

It's important to recognize that the economic ripple effect of egg production extends far beyond just egg producers. The industry supports a diverse array of occupations and industries across the supply chain, as evidenced by these top employment sectors.

Hope is the Thing with Feathers: Decline in Affected Bird Numbers

The latest report from the USDA brings a ray of hope. Between December 2023 and February 2024, the number of birds affected by HPAI in the United States plummeted from 11.43 million to 320,000. This significant decrease in affected birds raises the question: Will this lead to a reduction in egg prices in the coming months?

With the decline in the number of affected birds and the resilience of the U.S. egg-laying chicken population, there's reason to be cautiously optimistic. However, uncertainties surrounding factors like feed costs and market dynamics remind us that the road to price stabilization may be complex.

As stakeholders across the egg supply chain navigate these challenges, one thing is clear: the resilience and adaptability of the industry will play a pivotal role in shaping the future of egg prices in the United States.