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Food costs of HPAI likely underestimated

A livestock economist says the ripple effects of highly pathogenic avian influenza are just beginning to move through the food supply chain.

Michigan State University’s Bill Knudson tells Brownfield, “My gut feeling is that the USDA probably is underestimating the impact of avian influenza, you’re actually going to see prices higher than their forecast.”

USDA’s latest egg market report estimates HPAI and facility fires in 2024 resulted in the loss of nearly 40 million commercial egg layers across 12 states including in Iowa, Illinois, Michigan, Minnesota, and Ohio.

Outbreaks in November and December accounted for 43 percent of total losses for the year. A third of all losses happened in December and resulted in record-high wholesale and retail egg prices.

Knudson says more food products will be impacted with the virus still active.

“As the number of layers goes down, that’s going to get reflected not just in the price of eggs, but everything that uses eggs as an ingredient in their product,” he says.

Wholesale prices for large, white, shell eggs delivered to warehouses in the Midwest peaked for the year the week of December 30th at $5.75.

Knudson says he’s optimistic consumer prices on average will trend lower in the coming months compared to spikes seen during December from increased holiday demand and short supplies.

Brownfield interviewed Knudson as part of this week’s Michigan Agri-Business Association Winter Conference in Lansing.