Economists tackle estimating consumer effects following the loss of billions of birds and eggs lost to avian influenza

By Mary Hightower
U of Arkansas System Division of Agriculture

FAYETTEVILLE, Ark. — Fewer and more expensive eggs in 2024 put estimated $1.41 billion burden on consumers in 2024, according to study by a trio of researchers examining the impact of highly pathogenic avian influenza — HPAI — on the economy.

Expectations are for the price burden to continue through 2025 as producers work to repopulate laying hens lost to HPAI.

The study, “The Economic Impact of HPAI on U.S. Egg Consumers: Estimating a $1.41 Billion Loss in Consumer Surplus” was published last month by the Fryar Price Risk Management Center. It was conducted as an extension to an earlier paper, “Biological lags and market dynamics in vertically coordinated food supply chains: HPAI impacts on U.S. egg prices,” published in the journal Food Policy in 2024.

PRICE OF EGGS — Clocks in at more than $9 for 18 eggs on March 10, 2025, in Little Rock. (U of A System Division of Agriculture File photo)

The Fryar Center is part of the University of Arkansas System Division of Agriculture and the Dale Bumpers College of Agricultural, Food and Life Sciences.

James Mitchell, assistant professor and extension economist for the Division of Agriculture, was the lead author on both papers, which were written with Jada Thompson, associate professor and Division of Agriculture economist and Trey Malone, an economist formerly at the University of Arkansas, but now at Purdue University.

According to the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service, HPAI affected 38.4 million commercial egg laying birds and 29 flocks in 2024.

“As a result, we estimate an average week-to-week increase of 9 percent in retail egg prices, independent of other sources of egg price inflation,” the authors said. Using own-price elasticities — a measure of demand responsiveness to price changes — they estimated that price increases lowered demand for eggs by 2 percent on average.

“This reduction in consumption, coupled with higher prices, led to an estimated consumer surplus loss of $1.41 billion,” the researchers said. “This estimate reflects the economic burden on consumers due to reduced availability and affordability of eggs following HPAI outbreaks.

“The magnitude of these losses underscores the importance of understanding how disease outbreaks in the egg supply chain influence consumer welfare and market dynamics,” the three authors said.

The cost of eggs

While the cost of eggs may seem to be a simple supply vs. demand equation, determining the size of the economic loss is quite a bit more complex, say the economists.

“Someone not familiar with broiler or turkey or egg production might say, ‘oh, a bird died today because of bird flu and egg prices today are impacted by that’,” Mitchell said.

HPAI has been hitting broilers, egg layers and turkey production in the U.S. and globally hard since 2022, resulting in the loss of billions of commercial birds, not to mention birds and other animals in the wild.

“Our main thesis is that you have to consider a longer timeframe,” Mitchell said. “What’s happening today is a function of what happened six months ago.”

Because of the fierceness of the current strain of HPAI, which has a mortality rate of higher than 75 percent, whole flocks are destroyed once the disease is detected. Mitchell said if a flock has to be depopulated because of avian influenza or another cause, “you’re losing egg production from that flock.

“But you don’t just replace that flock tomorrow. It takes about six months for the new birds to reach maturity and start laying eggs,” he said.

Mitchell said that when they started their initial analysis looking at 2022 data, the challenge was “how much consideration had to be given to disentangling the impacts of bird flu from other things that were happening in 2022.”

Economic aftershocks from the COVID pandemic and the Ukraine war and resulting higher grain prices “were something we had to be careful about,” he said.

Price rollercoaster

When egg prices rise, so do the number of media interview requests for Thompson.

“The questions that are asked right now are, ‘Why are prices are high?’ And ‘when are they coming back down?’” Thompson said. She noted that in 2022, HPAI led to some 43 million laying hens being taken out of egg production” in the U.S.

That was possibly the largest loss of layers in one quarter, at least until 2024-25.

“In the fourth quarter of 2024, there was a loss of 20 million birds,” Thompson said. “And in the first two months of this year, some 30 million birds. That’s an astronomical number of birds being affected by HPAI.”

Much of the nation’s commercial egg production is concentrated in a fairly small area, including Minnesota and Iowa, Mitchell said.

There have been proposals within the industry to bring broiler eggs to the market, but both Thompson and Mitchell say that’s not an easy fix because the broiler and egg production systems don’t interact.

“It’s not the first time we’ve had this conversation,” Thompson said. “There are limitations on what can be done when dealing with a different system. How do we collect these eggs? How are we going to store and clean them? This will mean additional transportation costs.

“And egg prices are really high already,” she said. According to the Bureau of Labor Statistics retail egg prices reached $4.95 per dozen in January 2025, an increase of 96 percent compared to January 2024.

The research comes with a few important caveats. First, the estimate assumes that consumer preferences and purchasing behavior remained stable, meaning that consumers responded to price increases in the same way as they have in the past.

Second, the analysis focuses on the direct impact of HPAI on egg prices and consumer surplus, meaning it does not account for any indirect effects, such as potential changes in producer behavior or government policy responses.

“Despite these considerations, this estimate provides a clear and useful benchmark for understanding how HPAI affected egg prices and consumer spending in 2024,” the authors said.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk. 

Consumers can expect egg prices to decline, but not to 2021 levels

By Mary Hightower
U of A System Division of Agriculture

FAYETTEVILLE, Ark. — Egg prices won’t stay high forever, but with no clear end in sight for the current round of highly pathogenic avian flu, prices won’t descend to bargain basement levels, said Jada Thompson, a poultry economist for the University of Arkansas System Division of Agriculture.

In 2022, average U.S. retail prices for eggs rose from just under $2 per dozen to more than $4 a dozen. That compares with 2021, in which egg prices in January were below $1.50. The average retail price rose lazily through the year, but never reached $2 a dozen.

WHERE ARE ALL THE EGGS? — Empty space in the grocery store were the dozen egg containers were. Only a few stragglers, plus flats of 18-egg cartons remained. Taken Jan. 23, 2023. (U of A System Division of Agriculture photo)

“Highly pathogenic avian flu, or HPAI, has devastated the poultry industry in the U.S.,” Thompson said. “We are about 5 to 6 percent down in our layer flock, leading us to be down in our egg supply 5-6 percent year over year.”

However, HPAI is just one of the factors driving up the price of eggs since last fall.

“Add other factors like inflation,  and there’s fuel, which is impacting our transportation. Plus, you have driver shortages and that increases the cost of production and getting eggs to the market.

You have things like high demand in November and December — everybody wants those deviled eggs,” she said. “Then you add the war in Ukraine, which you don’t think about affecting eggs directly, but that affects global feed supply and trade around the world.”

Corn and soybeans play a big role in chicken feed, she said. Raising those crops has become more expensive thanks to fertilizer and diesel prices pushed higher by the Ukraine conflict.

“The cost of feed for eggs has gone up something like 29.5 percent,” she said. “That’s a substantial portion of the cost that goes into producing an egg.”

Outlook

Consumer price index, or “CPI, numbers are coming out and we are seeing some reduction in inflation, so that’s the easing of food prices in general,” Thompson said. “We’re seeing some of the wholesale, even retail prices coming down.”

Thompson said she and other economists will be looking at how bird flu affects the markets and the supply chain. However, there is no instant fix, since replenishing the supply of hens takes time.

“We don’t have a million birds laying around,” she said. “It’s six months before we have a bird ready to lay an egg. It takes 21 days to hatch an egg; five months or 20 weeks to get that chick to maturity.”

Thompson said that in November and December of ’22, the supply of birds was down.

AVIAN FLU — The current outbreak has been more widespread than 2015. (U of A System Division of Agriculture images courtesy Jada Thompson)

However, “pullets — birds that are between chicks and adults — are up 5 percent,” she said. “The replenishment chain has been trying to reduce the short supply. We’re still hatching.”

While all those activities are easing the supply and prices, Thompson said “egg prices won’t be declining to 2021 levels.”

Worse than 2015

The current avian influenza outbreak is worse than 2015, which was considered the largest animal health event ever. Laying hens are turkeys are more susceptible than other poultry, Thompson said.

Some 50.4 million birds in 15 states were affected by the 2015 outbreak, but the current outbreak has affected 57.9 million birds in 47 states. In 2022, layers comprised 75 percent of the poultry affected by HPAI. Turkeys were next at 16 percent, followed by broilers at 4 percent and breeders at 3 percent. In 2022, Arkansas had HPAI in three flocks affecting 56,470 birds.  

What’s difference?

The virus has adapted to not kill its host. “The wild birds are not as susceptible to it. Ducks and geese are not getting it as bad as turkeys and chickens” enabling a wider spread and giving the outbreak a longer life, Thompson said.

In 2015, “hot summers stopped the spread and we saw it die out,” Thompson said.

The only reason the current outbreak isn’t even worse is because industry and backyard flock owners are practicing biosecurity protocols learned from the 2015 outbreak.

“We have doubled down on biosecurity with truck washes, more personal protective equipment, which are used even during non-HPAI times,” she said.

Plus, Thompson said, there is increased surveillance and better reporting “and more communicating and social media reporting of that, and they are helping us know where the wild birds are migrating.”

"I have to give props to producers who have been increasing biosecurity, as well as local, state and federal agencies in communicating a lot more about biosecurity,” Thompson said. “As bad as this current outbreak is, this is us trying to slow this down.”

Fighting fatigue

“Outside this hemisphere, they’ve been fighting it for several years,” said Dustan Clark, extension poultry veterinarian for the Division of Agriculture. “We’re at a lull right now since migration is ceased, but we will fight it through this spring and probably again this fall.”

Clark says he’s seen the effects locally.

“I go to the grocery store and see people look at the eggs and move on,” he said. “Or sometimes, they just don’t find eggs.”

Over the last year, Clark has spoken dozens of times to producers and backyard flock owners and others through meetings and webinars, hammering home the need for biosecurity protocols. He said he would schedule more webinars this spring, when wildfowl start their northward migration.

“Since this virus has been detected in wild waterfowl in every state but Hawaii,” Clark said. “It’s an ongoing concern.”

“We are trying to keep everyone vigilant and hope they don’t get fatigued,” he said. “Once the virus slips in on you, it’s going to be problematic.”

In Arkansas, chicken eggs ranked No. 4 in terms of cash farm receipts at $568 million. Broilers topped the list with at nearly $2.7 billion, according to the latest Arkansas Agriculture Profile.

The Animal and Plant Health Inspection Service, or APHIS, which is part of the U.S. Department of Agriculture, has a site detailing confirmations of HPAI in flocks and a dashboard for tracking wild bird infections.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk.