Steep inclines that produce sudden, speedy plunges; a period of persistent or volatile ups and downs, fluctuating between prosperity and recession – both are definitions of a roller coaster. The same word used to describe the egg industry in 2015, and now, potentially 2017. Before we buckle up and embark on what could be a bumpy ride, let’s take a look back at the sequence of events over the past 2+ years that provide an eerily similar link between the past, present, and future of the egg industry.
In December 2014, Highly Pathogenic Avian Influenza (HPAI) was confirmed in British Columbia and Oregon. January of 2015 saw the same virus spread rapidly to Washington and California. By March of the same year it had appeared in the Mississippi flyway and within a few weeks, spread through Minnesota, Iowa, and Wisconsin. Ultimately, HPAI resulted in the destruction of over 10% of the U.S. flock, almost 37 million laying birds, and states of emergency declared in our home state of Minnesota and Iowa, among others. The outbreak ceased export of U.S. eggs and egg products to most countries around the world, and turned our Country into an importer of eggs for the first time in U.S. history.
Fast forward to this past December (2016) and January (2017), where HPAI viruses are being detected in the wild bird and domestic poultry in countries within Europe, Asia and Africa. In Europe specifically, France has been particularly hit hard by the disease, while Greece, Croatia, Ukraine, and Russia have reported cases in commercial birds. The virus has returned to African nations such as Uganda, Nigeria, and Egypt, and Asia has reported outbreaks in India, Japan, and Taiwan. Perhaps hardest hit is South Korea which recently removed 32 million farm birds, or nearly a fifth of its poultry population, and has started to accept emergency shipments of eggs from the U.S.
Throughout this period, graded egg prices have risen from less than $1.00 per dozen to almost $3.00, back below $0.70 to a more recent $0.95 per dozen (U.S. dollars). Spot markets in this period have been much higher than $3.00 and much lower than $0.70. The status of forced depopulation to create lower laying populations worldwide have buoyed the U.S. market which, through most of 2016, suffered the perfect storm of a recovered population of younger birds in full laying production, less exports than previous to the 2015 outbreak, and reduced demand for egg products caused by formula changes.
So if you are still in your roller coaster seat, how will the prevalence and havoc of HPAI impact the U.S. and egg producing industry with the Spring wild bird migration looming?
In the wake of the 2015 disaster, many measures were implemented in the industry to tighten biosecurity, personnel practices, and site conditions. The hope is that the outbreak in the rest of the world will serve as a warning to tighten up everyone’s awareness. With innovative direct efforts, such as identifying ways to reduce standing water retention on farms, creating lagoon designs that discourage water fowl, incorporating wash and sanitation stations that prevent contamination, or implementing progressive air quality measures, among other items, we can proactively manage the egg industry roller coaster. Keep your seatbelt on, as this ride has not come to a complete stop…