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Avian flu helps create shortage of eggs and higher prices at grocery stores

Experts say new Colorado law may also increase costs, but is unlikely to further reduce supply
Average egg prices increased by almost $1 during the month of December in the U.S. Department of Agriculture’s south central region, which includes Colorado. (Durango Herald file)

Those shopping for eggs in recent weeks may be familiar with the “limit two per customer” signs at area grocery stores, the result of a nationwide egg shortage stemming from the avian influenza.

Data from the Centers for Disease Control and Prevention showed the flu led to the depopulation of 57.8 million birds nationwide in 2022.

“We are seeing a widespread strain on the egg supply chain at this time, largely related to the avian flu,” said Kroeger spokeswoman Rhonda Remy. “Our team is working diligently to source additional product to meet customers’ needs.”

Amy Reid, owner of Jake’s Farm in the Hesperus area, said the avian flu can be devastating to egg producers because if one hen tests positive and dies the state euthanizes all of the birds on the farm.

“There's nothing we can do,” Reid said. “There's no vaccination and you just have to hope you don’t get hit with it.”

During its peak season, the Hesperus farm distributes about 250 eggs per week.

Fewer hens have led to a decrease in supply across the nation, including the inventory of large and extra large eggs.

The U.S. Department of Agriculture reported lower inventory in its egg market news report released on Dec. 27. The USDA south central region, which includes Colorado, shows a 6.6% decrease in egg inventory in its most recent weekly report. Regional jumbo egg inventory was down 2.2%, extra-large egg inventory decreased by 21.8%, and large egg inventory fell by 11.3%.

Darrin Parmenter, director of the La Plata County Extension Office, said the egg supply chain is experiencing a bit of a “perfect storm.” In addition to the avian flu, weather events have also taken a toll on the national supply. And while supply is down, demand during the holiday season is up, he said.

As of Dec. 30, regional large and extra-large shell egg prices on average were at $5.48 per dozen while medium-size eggs came in at $4.18 per dozen, which is almost a dollar increase from the beginning of December.

The shortage has lead to speculation over whether a new Colorado law which requires egg producers to be cage-free has played a factor, but many economists and egg producers seem to think it will impact cost more than anything.

House Bill 20-1343, which took affect Jan. 1, requires egg producers to demonstrate a ratio of 1 square foot per hen to become certified to sell eggs in Colorado. The law also requires all egg producers to keep hens confined in a cage-free housing system by the start of 2025.

Other regulations include hiring a private inspection provider to confirm compliance and then requiring producers to apply for a certificate of compliance through the Colorado Department of Agriculture.

Business owners also may not knowingly sell or transport eggs or egg products produced from a producer that is not compliant.

The requirement applies to shell eggs and egg products, which includes eggs and egg whites that are liquid, frozen, dried, raw or cooked.

“The Colorado Department of Agriculture is committed not only to the welfare of egg-laying hens, but also to fair and equitable trade of eggs and egg products as we implement this new regulatory program established through legislation,” said Mark Gallegos, director of CDA’s Inspection and Consumer Services Division in a December news release.

Reid said she doesn’t think the law will have much of an impact on producers because most producers in the state already follow the guidelines required by the mandate, and caging hens is an outdated practice. She said the avian flu is more likely responsible for the supply shortage.

She said the law may impact prices because large-scale egg producers will use it as an excuse to increase prices. She said words like cage-free or free range are often used to promote a rhetoric around products for better sales.

“It's a word that's used as a trick because people think that means they go outside because they're not in cages but they're still able to be in buildings,” Reid said.

Fort Lewis College economics professor Nate Peach said the new law will most likely put upward pressure on prices, and he can’t imagine a scenario in which it would make eggs cheaper.

“Because now someone has to certify these farms and that takes time and effort, which means that person has to be compensated,” Peach said.

He also said creating more space for hens will likely be reflected in the cost.


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