U.S. egg prices to hit record high due to bird flu: USDA

By Tom Polansek
Safeway brand Lucerne eggs are seen at the store in Wheaton, Maryland February 13, 2015. REUTERS/Gary Cameron

By Tom Polansek

CHICAGO (Reuters) - The average price of a dozen eggs in the United States will climb to a record high this year due to the nation's worst-ever outbreak of bird flu in poultry, U.S. Department of Agriculture data issued on Wednesday showed.

The USDA, in a monthly supply and demand report, increased its forecast for the price of Grade A large eggs in New York in 2015 to $1.60 to $1.66 per dozen. That is up from its May estimate of $1.30 to $1.36, and tops last year's average price of about $1.42, which was a record high, according to USDA data.

In the fourth quarter of 2015, eggs will average $1.73 to $1.87 per dozen, up from about $1.63 a year earlier, the USDA said. Last month, the agency predicted a dozen eggs would cost $1.33 to $1.45 in the fourth quarter.

Nationwide, more than 47 million chickens and turkeys have been killed in the past six months because of bird flu or are set to be culled to prevent the spread of the disease. Most are hens in Iowa, the top U.S. egg-producing state.

The impact of the losses is expected to stretch into next year, with USDA raising its estimate for average egg prices in 2016 to $1.36 to $1.47 per dozen from its May estimate of $1.28 to $1.39.

Consumers are already feeling the pinch.

At a Mariano's grocery store north of Chicago, signs affixed to refrigerated cases said the company had to raise egg prices because of the outbreak. They featured charts illustrating a 112 percent jump in egg costs since May.

"Prices for all egg sizes in all regions across the country are up due to the avian flu and a reduction of the national flock size, which has led to a shortage of eggs," said James Hyland, a spokesman for Mariano's owner Roundy's Inc.

In New York, restaurant chain europa cafe told customers it raised prices 10 percent for egg sandwiches, omelets and other breakfast foods containing eggs. In Texas, burger joint Whataburger has reduced the hours it serves egg products.

Imports may help compensate for reduced domestic production. The USDA pegged 2015 egg imports at 41.4 million dozen, up 32 percent from its May forecast and 26 percent above 2014 imports.

Still, total supplies are expected to drop 4 percent from last year to 8.1 billion dozen, according to the agency.

(Additional reporting by Toni Reinhold in New York; Editing by Peter Galloway and David Gregorio)