Bird Flu's Impact on Egg and Milk Markets varies
Source: dairynews.today
The outbreak of H5N1 in California has led to soaring egg prices while dairy prices remain stable due to different market dynamics.
The ongoing spread of H5N1 bird flu has resulted in significant disruptions within the Californian egg market, contrasting starkly with the stability observed in the state's milk sector. California's egg production in December 2024 fell by 30% compared to January 2022, primarily due to the virulent nature of H5N1, which severely impacted egg-laying hen flocks across the state.
This sharp decline in production is a stark reminder of the flu's economic repercussions, with egg prices in California surging above $7 per dozen by late 2024, outstripping the national wholesale price which surpassed $5 per dozen. Despite producing over 15% of U.S. milk, California has seen a lesser impact on milk prices due to H5N1.
According to Daniel Sumner, a professor at UC Davis, the widespread usage of California's milk for processed foods has cushioned the state from potential price hikes.
The report highlights that while milk production in California did decrease by 6.4%, 10.3%, and 8.4% over the final three months of 2024, these reductions did not translate into consumer cost increases due to the global nature of the milk product markets.
The long-standing presence of avian influenza has been exacerbated in recent years, with the 2022 H5N1 outbreak causing a national imposition of cage-free egg production regulations, intentionally raising baseline prices.
Agriculture experts Olena Sambucci, Daniel A. Sumner, and Erica A. Van Fleet have dissected these market dynamics in their comprehensive report available through the UC Giannini Foundation of Agricultural Economics, shedding light on the broader economic implications for Californian consumers and farmers.
They emphasize the inherent challenges faced by the agriculture sectors and the major income losses suffered by dairy producers, psychologically impacted but economically buffered from immediate drastic price leaps as they await recovery.
This sharp decline in production is a stark reminder of the flu's economic repercussions, with egg prices in California surging above $7 per dozen by late 2024, outstripping the national wholesale price which surpassed $5 per dozen. Despite producing over 15% of U.S. milk, California has seen a lesser impact on milk prices due to H5N1.
According to Daniel Sumner, a professor at UC Davis, the widespread usage of California's milk for processed foods has cushioned the state from potential price hikes.
The report highlights that while milk production in California did decrease by 6.4%, 10.3%, and 8.4% over the final three months of 2024, these reductions did not translate into consumer cost increases due to the global nature of the milk product markets.
The long-standing presence of avian influenza has been exacerbated in recent years, with the 2022 H5N1 outbreak causing a national imposition of cage-free egg production regulations, intentionally raising baseline prices.
Agriculture experts Olena Sambucci, Daniel A. Sumner, and Erica A. Van Fleet have dissected these market dynamics in their comprehensive report available through the UC Giannini Foundation of Agricultural Economics, shedding light on the broader economic implications for Californian consumers and farmers.
They emphasize the inherent challenges faced by the agriculture sectors and the major income losses suffered by dairy producers, psychologically impacted but economically buffered from immediate drastic price leaps as they await recovery.
