Avian Flu has been rearing its ugly head in the U.S. Midwest early this year with over 40 million birds being affected as a result since December 2014.
Farmers have been battling the outbreak which has taken the lives of over 25 million birds - including hens and turkeys - which has resulted in a depletion in eggs. The outbreak has also forced many farmers to kill birds so as to stop bird flu's spread. It is estimated that 10 percent of the U.S.' egg supply has been affected by Avian flu.
The gravity of the situation is so much that experts estimate that eggs and egg-related products may become expensive in the near future. U.S. consumers will have to shell out nearly 75 percent more for eggs when compared to 2014 per Goldman Sachs' analysts.
On Wednesday, May 20, the analysts revealed in a report that the resulting squeeze translates to a spending of $7.5 billion to $8 billion for eggs which are now hard to come by.
The analysts also opine that McDonald's could be the most affected notable restaurant chain as it will not be able to pass on the higher costs from its breakfast business, which is immensely popular. The company generates 25 percent of its sales from breakfast alone, which is double of its rivals
To counter the paucity of eggs, several companies who rely on eggs are considering importing the same or seek out alternatives.
Archer Daniels Midland Company, which makes plant-based substitutes for eggs, has been inundated with inquiries from manufacturers as the egg supplies whittle down and the price of the same sees an uptick as a result.
The wholesale price of eggs has risen from 63 cents for a dozen in end April to $1.83 for a dozen this week. The wholesale price for shell eggs has also seen an increase from $1.19 per dozen to $2.03 for a dozen.
The scarcity of eggs has also led several food makers to turn to shell eggs as a supplement, even though these are expensive and mean additional cost (as they need to be sent to a breaking facility for the shells need to be cracked).
Analysts at Goldman Sachs are not too optimistic of the situation getting better anytime soon.
"The situation could deteriorate further before it ultimately gets better," note Goldman Sachs' analysts
Photo: Moyan Brenn | Flickr
