Egg prices soar, menu items dropped in wake of historic avian flu

The impact of the deadly outbreak of H5N2 avian influenza, which has sickened more than 48 million birds and forced poultry producers to cull their flocks, has trickled down to grocery stores and restaurant owners. The USDA predicts egg production will fall 5% this year to 6.9 billion dozen, and that shortage is translating to higher prices.

By late May, the price for a dozen Midwest large eggs had jumped 120% in a month to $2.62, according to industry figures collected by the Associated Press. The American Egg Board is now predicting it could take the egg industry two years to resume normal production levels.

Many restaurant owners are struggling to adjust to the changing egg market. Nick Bartholomew, owner of Omaha restaurant Over Easy, tells the AP his costs have skyrocketed 15% and he's now having to source eggs from several different producers. He recently removed an egg casserole from his menu. Chains such as Colorado-based Le Peep have seen their fixed-price contracts with egg producers nullified, leaving them with higher costs that they're passing along to diners by raising prices.

Although the avian influenza outbreak seems to be waning somewhat, new fears have emerged that the virus could be airborne--or at least more mobile than initially assumed. Veterinarians at the University of Minnesota recently visited 6 infected poultry farms located in their state, Iowa, and Nebraska and found the virus inside and just outside barns at 5 of them. That could raise the risk of the virus sticking to tires or feathers and inadvertently getting transported to neighboring farms.

But one company has benefited from avian influenza simply by virtue of not being affected by the epidemic: Cal-Maine Foods ($CALM), the nation's largest egg producer. None of the company's 36 farms have been hit--a stroke of fortune that has sent its stock soaring from $38.78 at the beginning of April to $54.29.

Cal-Maine marketing director Alan Andrews tells Opposing Views the company isn't taking the risk of avian influenza lightly and has been following the USDA's advice on how to keep its chickens healthy. "We are doing everything we can that we think is the right thing to do."

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