Friday, February 28, 2025

Supply Lines: Egg crisis

US President Donald Trump this week summed up the extent of the egg crisis when he called it a "disaster."Across the country, grocery stores
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US President Donald Trump this week summed up the extent of the egg crisis when he called it a "disaster."

Across the country, grocery stores are limiting customer purchases, restaurants are adding surcharges and border control agents are battling egg smuggling. Even comedians and social media influencers have been rolling out musings on a daily basis.

Prices have soared to a record of over $8 a dozen, driven by the worst-ever outbreak of avian flu in the US and contributing to broader inflation pressures. Millions of birds have been killed in just a few months as egg-laying farms get hit from California to North Carolina, forcing the government to take steps to tackle the problem.

"Eggs are a disaster," Trump said during a Cabinet meeting on Wednesday. "We have to get the prices down, get the inflation down, the prices of eggs and various other things."

As Bloomberg Opinion's Patricia Lopez writes, the crisis is now Trump's to deal with. But she says his administration has only made matters worse with mass firings that included an unconfirmed number of people working on the bird flu response. Prices could jump 41% this year, the US Department of Agriculture says.

America is now looking to other countries to come to the rescue. It will try to import between 70 million and 100 million eggs in the next month or two, the USDA said this week as it announced a $1 billion plan to address bird flu.

The situation in the US is already causing ripples elsewhere. Turkey — one of the world's biggest egg shippers — introduced a tax on exports to help control domestic prices, as bird flu outbreaks squeeze global supplies.

Eggs have become more expensive in other regions as well, albeit for different reasons. In the past five years, prices surged across Europe, South Africa, India and Brazil to name a few, according to Rabobank.

Demand for eggs remains strong, said Nan-Dirk Mulder, Rabobank's senior global specialist for animal protein. While bird flu is an important driver of prices, the rise of egg-based breakfast sales, high animal-feed costs and a shift to cage-free farming are also factors, he said.

Tune In for More

Listen to this Big Take podcast where farmer Jim Hayes and Bloomberg's Tracy Alloway and Joe Weisenthal talk about bird flu and egg prices. Watch Bloomberg TV on the success of the McDonald's Egg McMuffin. And for more chicken musings, catch up on the Odd Lots' Beak Capitalism three-part podcast series. 

Agnieszka de Sousa in London

Charted Territory

Food appetite | The US, known for being a global agriculture powerhouse, has never imported so much food. Inbound shipments of everything from avocados to coffee and sugar are expected to drive the country's agriculture trade deficit to a record $49 billion this year, the USDA said in its trade outlook report. At the same time, America's most widely grown crops have been losing overseas markets over the past decades. It's a stark turnaround for a nation that once used its abundant food supplies as a tool of statecraft, with the US now facing a future of persistent agricultural trade deficits. (Read the full story here). 

This Week's Must Reads

  • At least a dozen family-owned chocolatiers have closed down across Europe over the past year — casualties of a fourth straight season of tight cocoa supplies, which have driven up prices and squeezed margins across the industry.
  • The US trade group representing restaurants urged Trump to spare food and drinks from tariffs, estimating the levies could cost the industry more than $12 billion and lead to higher prices for consumers. 
  • Beyond Meat announced it's laying off about 6% of its staff, adding to the list of consumer companies that have trimmed their workforces recently.
  • Hungary plans to impose profit curbs to contain soaring food prices that led to a resurgence of inflation a year before crucial elections.
  • The founders of Ben & Jerry's have expressed interest in buying back their namesake ice cream brand from Unilever, according to people familiar with the matter.
  • Electric drones are helping cut the use of pesticides and lowering emissions on banana plantations across Latin America. 

On the Bloomberg Terminal

  • With America's farm economy in a prolonged slump, growers are set to boost acres of corn to a five-year high while reducing soybean sowings, the USDA said in its first 2025 planting outlook, Bloomberg News reports.
  • Packaged food's better ESG performance can cut operating costs and improve risk management amid supply-chain challenges and environmental hurdles, including those tied to energy, water and waste, according to Bloomberg Intelligence. 
  • Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
  • Use the AHOY function to track global commodities trade flows.
  • See DSET CHOKE for a dataset to monitor shipping chokepoints. 
  • For freight dashboards, see BI RAIL, BI TRCK and BI SHIP and BI 3PLS
  • Click HERE for automated stories about supply chains.
  • On the Bloomberg Terminal, type NH FWV for FreightWaves content.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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