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Eggheads is the go-to podcast for egg industry professionals who are interested in leadership and innovation in the egg world. Host Greg Schonefeld explores the evolving world of modern egg farming, from the latest in cage-free innovations and organic certifications to navigating the economics of large-scale production. Whether you're an egg producer, supplier, or involved in poultry genetics, this show provides the insights and expert discussions you need to thrive in the industry. Crack open the science, strategies, and stories behind the egg industry’s biggest challenges and opportunities.
Greg:
Hi, I'm Greg Schonefeld and this is Eggheads. For this episode, we'll be returning to our special Scramble format where we seek out the opinions of our most trusted experts to get their takes on the most pressing issues in the egg industry. Today we'll be talking avian influenza, why we've seen cases drop significantly and the many questions surrounding the virus that still need to be answered.
Kay:
This whole additional element of the dairy cases makes the situation more complex.
Greg:
And then Brian Moscogiuri, Vice President at Eggs Unlimited, will be joining us to talk about how egg prices are responding to a little bit of a break from the explosion of HPAI we had to start the year.
Brian:
There's still a huge shortfall between the amount of birds servicing the consumer in the United States.
Greg:
That'll come later, but first it's Dr. Kay Russo, a veterinarian and expert in all things bird flu, bringing us an update on the amount of infections we've been seeing in recent months and what that tells us about how the situation is likely to progress through the fall and into the winter.
Kay:
So I think we over the last few months have seen a reduction in cases on the poultry side. We still are getting sporadic cases. We've had, I think three within the April to May timeframe on commercial premises, one of which was just announced on May 19th, which is a large complex in Maricopa County, Arizona. They have a 2.26 million birds, which is a combination of both laying hens and pullets that were housed on site. We've seen a turkey outbreak here in the last few weeks. And then I think there was a South Dakota facility that was a commercial table egg layer facility that lost 630 plus birds. And then in Ohio in April, there was a commercial facility that lost just shy of 300,000 birds. So we are still seeing outbreaks, but it's more of a trickle versus an explosion. The Ohio, Indiana explosion that occurred at the start of 2025 really caused a major deficit in the number of table egg laying hens in combination with the losses that were incurred in California.
So at this point, some facilities are starting to repopulate. I know in California they're starting to repopulate a little bit, but everyone's kind of holding their breath to see whether these facilities stay negative, because in California they're still a number of dairies that are under quarantine with the virus. And then on the dairy side, we are seeing an escalation of cases in Idaho. So whether those pre-existing infections that have just been circulating in the background on those facilities or whether they're new infections is really yet unclear. But they've got over 100 dairies affected out of the 300 some they have in the state right now.
Greg:
I guess sticking with what you said about the impacts to the egg market recently, is what we're seeing there. Does it mimic last year, in prior years, the spike, but then the slowdown around this time of year?
Kay:
The virus is endemic in those waterfowl that are moving along the flyways during spring migration. So we tend to see an escalation of cases in spring and then in fall when they're moving again. But the summer months with the cessation of migration coupled with the higher temperatures, sunlight, will tend to see a dampening of cases. And so I think part of that's being reflected here, but again, we're still holding our breath because this whole additional element of the dairy cases makes the situation more complex. Does that mean that that virus is going to be constantly circulating in the background? And if it is, what level of risk does that pose to poultry on a non-seasonal, so year-round basis? And that's the billion dollar question here.
Greg:
Do you know the recent outbreak in Arizona? Was that of the bovine variant or not?
Kay:
So interestingly, the USDA kept emphasizing throughout this outbreak that this was a fluke, a one-time spillover event. And so this B3.13 genotype was considered a once in a blue moon situation. Well, that got debunked as well because we have detected an additional genotype. The D1 genotype, which is the one that's predominantly moved by waterfowl, we've now detected that in herds in Nevada as well as Arizona, in Maricopa County, Arizona. And so those dairy herds are positive for D1. And so it comes down to looking at the virus that they isolate from that flock that was affected in comparing the genetic sequence of that virus to that of the dairy farms in Maricopa County. And if they line those up and they are a very close match, then it could give indication as to whether the virus spilled over from dairy or whether it was moved in by the migratory waterfowl, which some are still present in that area. And whether we'll get that information anytime soon, I just don't know.
Greg:
So if that was D1 and we don't know if that came from migratory or somehow from dairy, that might kind of give us some indication of whether we're going to see this stick around all year round or more likely to be continued to be tied to migratory patterns.
Kay:
Correct, and I am going to go out on a limb here and say that this virus is not going away from dairy, and so the likelihood that it continues to impose some level of risk to neighboring poultry operations is going to be a decent likelihood. In Michigan, we saw Herbruck's Poultry just get decimated by infections that spilled off the dairies. I think they lost over 6 million birds in a short period of time. In Minnesota, we saw a number of outbreaks of B3.13 in association with unreported dairies. We saw turkey flocks go down, at least one large layer complex go down. Iowa we saw situations where there was a number of flocks depopulated in association with cattle infections. Utah, I mean, the only reason we found out that Utah was infected in their dairies is because there was an egg layer facility in northern Utah that got hit. And so unfortunately, the poultry have served as probably the most expensive test for detecting a flu virus in neighboring dairies in the history of mankind. So really unfortunate for the poultry industry that they've served as this canary in the mine.
Greg:
Some of those examples you pointed out really kind of hit that, okay, even if it's not a huge dairy state, it just takes maybe one farm in the wrong proximity to an egg operation and that's all it takes.
Kay:
And I'll give you an example here in Colorado. I have a dairy farm for whom I was the veterinarian years ago, and they have an egg laying facility that's about a mile down the road, and when they became positive with the virus, they were honest and called the poultry facility and said, "Hey, we're positive. We want to give you a heads-up." But it was like clockwork. Within, I think it was 10 days time, that poultry facility went down even though they were aware of it and tried to heighten biosecurity. And so it feels like an insurmountable task when you have that much virus rolling off of a neighboring farm, you're trying your best in your poultry facility, but it's still really hard to keep it out.
Greg:
I guess one thing I saw you post about was milk testing is now a requirement by the USDA. Is that something that can make an impact?
Kay:
Well, I think it gives us a retroactive picture of what's going on in states that are doing essentially the bare minimum of the National Milk Testing Strategy. And that bare minimum is to test the silos at a processing plant four times every six months, and the silos can be comprised of milk from multiple different dairies. And so to give you an example, in Nevada and I believe Arizona, those D1 genotype dairies were identified through the National Milk Testing Strategy. So they found the virus in the milk silos, then they had to go and figure out which farms contributed to those milk silos and find them and test them. And so from the time of initial detection to actually finding the farms, it was well over a month.
And so while it gives us a picture in the rear-view mirror of what dairies are affected, unless you're testing on a more real time, say weekly or bi-weekly basis, then your ability to do anything actionable on the ground to prevent regional spread or to protect the workers is minimal. There are other states like Colorado, I'm using that as an example again, in the height of their outbreak, they were testing every week and they still test every other week on every single grade A dairy. So when the milk is picked up, the processor picks up a sample and it gets sent to the diagnostic lab and tested bi-weekly. Now that gives us more real time information.
Greg:
Is the milk testing the only step that really has been taken?
Kay:
When they test positive there is that quarantine. I don't think that quarantine is true quarantine as we consider it on poultry, which is very close monitoring of animals and products into and out of a control zone. They're still moving non-lactating animals on and off, animals are still going to slaughter, so there's still a lot of animal movement that we wouldn't even think to do in a quarantine zone with the avian influenza on a poultry premise. I know that they're working towards vaccines for cattle. There was a recent announcement that one of the vaccines that they were looking at in a challenge study was effective in reducing viral shed from calves inoculated and then challenged with H5N1. How far we are off on commercializing these vaccines, I'm not sure. Whether we're even going to be able to use them, I'm not sure, because again, the trade barrier comes to mind. If we vaccinate cows, will it impact our ability to export broiler meat? I don't know.
Greg:
Oh, interesting. So that link could exist even in the dairy cows.
Kay:
It could, and I'm befuddled. We've been in this since 2022. And USDA said, "Well, they're just now putting together a surveillance strategy and vaccine protocol to present to our trade partners." We're in the worst animal outbreak in the history of perhaps the world, and we're just now doing that. I mean, where is the proactivity here? And so really the first step happens on the political level with that, and we just haven't done what we need to do. And unless it gets really bad again, the consumer starts to feel the pinch with egg prices again or people start dying, the immediacy right now is gone. And also, don't get me wrong, while the science is a big piece of this, there's also a lot of tit-for-tat trade wars that happen and people use the vaccines as an excuse to not accept the products.
But one notable thing that happened within the last week or so is that Brazil had their very first outbreak of highly pathogenic avian influenza on a commercial farm. And if you look at the news, all of these different countries that have put up their blocks and are no longer accepting export of poultry products from Brazil is truly remarkable and they're the top exporter in the world of poultry products by far, US is the second. But perhaps maybe that will change the landscape a little bit now that they've kind of gotten hit. And so maybe the conversation will further along now that this is not a US problem, this is a global problem, it's a transboundary problem, and so it's going to require a global solution. And so hopefully in the US continues with the forward momentum and with vaccines and some of the other tools that we need to get ahead of it.
Greg:
Last time in the Scramble episode you said if we get some relief, we shouldn't rest and bury our head in the sand. We should take it as an opportunity to get ahead. How would you rate our efforts so far?
Kay:
I think we've seen some slow momentum forward. I know that the United Egg Producers have commissioned an epidemiologist to help to spearhead some investigations that are so desperately needed for these outbreak situations, and I think that's a really pivotal piece of this puzzle that we're missing because we don't know how this virus is moving and without knowing how it's moving, we don't know how to stop it from coming in. I think the USDA is moving forward with some of these, basically the information that they need to compile to present a trade partners to allow us to vaccinate. Now, whether it's on my timeline that I like or not, I think is probably the latter, but at least they're starting to talk about doing that. Roland's released this sort of five point plan that encompasses different things like bolstering biosecurity and helping to pay producers to bolster their protection.
They're releasing some money for investigation of quote, unquote, "therapeutics" and new vaccines, but ultimately at the end of the day, I was kind of hopeful we'd have vaccines come fall given the severity of the outbreak in 2024 and 2025, but each day that goes by, I'm becoming less hopeful of that. So I think it's just going to, we're have to continue to rely on our typical tactics in biosecurity and some of those other pieces that we've employed in the past and just cross both fingers and all of our toes and hope that it doesn't wallop us this summer and fall like it has been.
Greg:
So that's the science piece taken care of. We've gotten the lay of the land on HPAI and an update on the efforts to keep it under control. Now let's turn to another one of our favorite guests, Brian Moscogiuri, to get into the economics of it all. How are declining rates of HPAI impacting egg prices and how is that stabilizing market aligning with consumer demand? Brian, last time we were talking, we were just starting to come off all time highs. I think you mentioned the market had dropped maybe $4 in a relatively short period of time from maybe an eight something kind of mark. Just curious what's been happening since then.
Brian:
Yeah, I mean, the market's been kind of in this continued state of adjustment from those record highs. We were up over $8.50 a dozen for large in the Midwest in terms of Urner Barry's benchmark, and currently we're down into the low threes. We had a little bit of a stabilized period, even a slight up right after Easter, which was kind of unusual the way the market went up so quickly and went up over a couple months period of time with the continued AI outbreaks. It just took them a while to pass costs along at the shelf. And in addition to that, the media was just really kind of banging the drum around eggs and shortages and avian flu and high prices, the politicians were involved in "Why are egg prices higher under Trump, and what is he going to do to fix it?" All that kind of stuff.
And as this situation kind of corrected itself, nothing kills high prices like high prices. So those prices are passed along at the shelf, demand starts to slow down, inventories start to rebound. Bird flu just so happens to die off for whatever reason, at least slow down significantly, and with slowing demand and mounting inventories, that's ultimately what brings the prices down. And we got through the Easter period without any major bird flu disruption, high prices at the shelf, not a lot of seasonal promotional activity that we typically see around the Easter holiday period. And now we're going into this post Easter period and May is typically one of the slowest periods of demand highlighted by Memorial Day, which we're just coming off of Memorial Day weekend. It's back to grilling, it's chicken and steaks and hot dogs and hamburgers and salads, and the next kind of major push around eggs is the back to school season, which is a couple months away.
Greg:
And then it's interesting, you mentioned there weren't the normal Easter promotions. Is it just kind of the whole environment made it difficult to do that sort of thing?
Brian:
Yeah, it's pricing and availability and knowing we just came off a period where we lost 50 million birds and supply is very, very tight. We're coming off of record high prices. I mean, it's just not something I think the retailers were willing to risk, assuming where the market would go or if we would have additional setbacks in terms of production losses. I mean, I think most would've bet on seeing more birds going down through the end of February because we've seen the spring outbreak impact layers from April through June, so it's been surprisingly quiet. It's not that bird flu is totally out of the system, but we're not seeing the major outbreaks impacting supply the way we were back in the early part of the winter months there.
Greg:
Yeah, and January and February were just pretty off the charts
Brian:
Unprecedented. I mean, from middle of October through the middle of February, it was the worst bird flu outbreak that we've ever seen in the United States.
Greg:
So I guess with bird flu subsiding for a period and not being the dramatic driver that it was in January, February. What else is kind of driving egg prices today? I mean, you've talked a little bit about the seasonality. Is there something else to consider today?
Brian:
Yeah, I mean, like I said, it's the seasonality. It's also the fact that we haven't lost major production facilities, which now you're talking about farms that went down all the way back in October. We're getting into that six month window where we typically see production starting to come back in and some of those barns being repopulated. So we're starting to see production recover. It's recovered slowly, but as long as we don't see major setbacks, we should see more birds starting to repopulate these houses through the summer months and hopefully get back over that 300 million bird mark. Obviously, prices have been slow to adjust lower, just like they were slow to adjust higher. We're just finally seeing some of the major retailers getting their single dozen conventional prices below $3 a dozen for the first time in four months to say. So as the consumer starts to see some of these lower prices, perhaps there's some pent-up demand which will help to stabilize this market.
That being said, inventory levels aren't drastically high. There's still room for processors to put finished product away that they've been waiting for opportunities to do so with cheaper input costs. The imported product continues to kind of roll in to some extent, although the domestic markets are now much more competitive with even the imported values. So I would think that that stuff starts to slow down a little bit because the domestic market seems to be fairly well supplied at the moment. But that being said, some of those imported eggs are booked on contract and will continue to flow in, at least for the time being.
Greg:
The prices have dropped quite a bit from those highs into the low threes. Can you put that in kind of historical context? Is that still high?
Brian:
Yeah, so even though the market fell below $4 a dozen right around that peak Easter demand period, and it felt low considering we were coming off of a market that was up over $8.50 a dozen, it would've still been the highest Easter market on record. I remember back in 2015, I think the record high at that time was like $1.88 or something like that. I mean, there's other factors involved in higher prices of commodities across the board, including cost of goods sold, packaging, labor biosecurity efforts that are ongoing, but ultimately it's tight supply. Even though we haven't had bird flu and there's been a little bit of recovery, we're still under 290 million chickens in the country, and we're talking about a population that's well over 335 million people, so there's still a huge shortfall between the amount of birds servicing the consumer in the United States.
Greg:
So if we talk now about seasonal demand, would love to hear your thoughts about can anything be deciphered on long-term demand right now?
Brian:
Yeah, I mean, I think if markets were normal, we'd be in probably one of the strongest organic demand environments for eggs that I've ever seen in my 14 years in the industry. I think all of the talk around eating more protein, eating clean products and all of the negativity around artificial ingredients and sweeteners and colors and all this stuff, I think it bodes really well for eggs and egg ingredients. Back in 2015, 2016, there were a lot of different gums and binders and egg extenders and different products that seemed to really kind of take some of that market share, and I would say it doesn't feel like that push has been as strong, even though this avian flu issue has gone on for the last three years. I think American Egg Board just kind of got this pushed along that eggs are able to be called healthy again. So that to me is really strong in terms of demand.
Ultimately, I think as the media starts to die down, as consumers start to see prices that they're more comfortable with, demand will return. If the product was replaced in terms of an ingredient, so like a dried egg product or something like that, and they did make the switch away from eggs, those types of replacements tend to be slower to return because you got to think about formulation and packaging and all that other stuff that takes time to switch over and then obviously takes time to switch back. You're also not seeing probably the amount of innovation and food service promotion, the breakfast sandwich promotions that maybe you would typically see during the summer months because the supply concern, because prices are high, but hopefully as people feel more comfortable that the market is normalizing and some of these promotional planners feel more confident that they could roll those features out, there will be pent-up demand to run those types of features and run those types of new product initiatives once there's some peace of mind around supply and where these markets are going to be for I guess the foreseeable future, like you said.
Greg:
So we've talked about bird flu has subsided some. Do you have any insight on any risks of oversupply?
Brian:
Certainly. I mean, it seems like everyone is expanding. It seems like there's new entities coming into the US industry, whether that is smaller farms that are looking to expand or even some of these acquisitions. So Hillandale was recently acquired by one of the biggest Brazilian producers, so there's foreign investment coming into the market. There's also domestic investment, I'm sure private equity looking for ways to get into the market with all the coverage that the profitability around eggs has garnered, like I said, in the media again. So I do think we will see an expansion of the flock whenever AI totally goes away, and that's something we saw back in you 2016 and 2017 when we had the highest production levels on record, over 342 million layers I believe it was. So I would have to assume once repopulation occurs, plus the expansions, we're going to get back up to some of those very high production levels, if not some of the highest production levels we've ever seen.
Greg:
The nightmare scenario or the really bad scenario would be that point in time a few years after bird flu hit in 2015 where market prices were lower than the cost to produce. Can that happen overnight basically?
Brian:
Yes and no. I mean, we're so far behind in terms of production, we don't know how demand is going to be balanced out as prices normalize. It took a couple years to get there after the 2015 outbreak, and some are saying polling availability could be out a year to two years in terms of getting replacement birds. You also have the lead time. You probably know better than anyone if you want to start a million bird chicken complex, what is the lead time on that to get the permitting and the materials and the construction and the machinery and the employees? So I don't think it would happen overnight. I think it all depends again on if we lose more birds and ultimately the replacement bird availability, how quickly they can get those birds back in.
Also, on the demand side, there's been a number of X factor events in my tenure that have created opportunities not only in the US, but internationally as well, where other countries have been short and needed US eggs. But who knows? Maybe the demand around eggs supports the growth and eggs are one of the best things that you can eat. I think they're a super food, and I think when the prices get cheap enough, demand will really start to soar again.
Greg:
I mean, we've talked about long-term demand, we've talked about seasonal. I mean, if you were going to just kind maybe summarize an outlook or key factors over the next 90 days, what would that be?
Brian:
Key factor number one is do we see bird flu continue to impact farms and which farms are hit and which supply chains they service? Recovery bird numbers, September, October, November, December, that's really the key demand season of the year. Where are we going to be in terms of supply as we get into the peak demand season of the year? Obviously, we'll then be in another migratory period in the fall where we've seen bird flu impact layers just this past year and the two years prior in October. And then what are the retailers going to do as we go through the summer months? If we do see some of the lowest markets that we've seen in the last few years, are they going to start promoting again? Are they going to help to support demand recovery and bring some of that back?
Ingredient users, innovation, food service promotions, all that stuff I think kind of starts to come back on the table as the buyers and the promotional planners start to get a piece of mind that, okay, maybe bird flu is done here for a period. Markets are relatively cheap from what we've seen in the short-term history. Imports and exports, are we going to continue to bring product in from overseas? Does that start to slow down? Are there export opportunities where other areas of the world are needing us eggs? I think we're starting to get closer to those price points where some of those international markets start to make sense as well, and then any sort of, who knows, government intervention. That to me is the biggest X factor because that's something that takes the market out of the market. Now you have somebody actually tinkering with the fundamentals of supply demand and price and how they typically work in normal commodity markets, but ultimately watching the retail shelf price and how consumers react to lower prices again, I think that's really the key as we go through the summer months.
Greg:
So I guess the takeaway here is that the outlook for the egg market is pretty similar to the outlook for HPAI, stable at the moment, but with too many different variables at play to say anything definitive about the future. If HPAI spikes again, we could see supply constraints, price spikes, and maybe more international producers coming into the US market to fill those gaps. If HPAI levels stay low and production ramps up too much, theoretically, we could see inventory flood the market and prices decline even further in the future. Brian doesn't seem to think that risk is imminent, but he did point to a whole lot of new investment in the industry, and as these new operations come online, that'll be something to keep an eye on. In terms of HPAI, the numbers remain low for now, but the presence of bird flu and cattle and repeated spillover events mean producers need to stay vigilant.
More information about where these new variants are coming from and how they're spreading could help the industry plan and hopefully make subsequent outbreaks less disastrous. Since our last Scramble episode, there seems to have been some progress made, but the political deadlock surrounding vaccines remains. Kay doesn't seem optimistic that'll change anytime soon, especially because cases are down and policymakers might not be feeling the same sense of urgency, but this recent outbreak in Brazil could wake people up to the reality that this is not just a US issue, but a global problem. Maybe that realization is the thing that could finally lead to action on this. I hope you enjoyed this special Scramble episode, and I hope you feel a little more informed. As things continue to evolve, we'll keep bringing the experts to help you navigate through the uncertainty.
Make sure you follow Eggheads on Spotify or Apple Podcasts and connect with us on Instagram and LinkedIn too. If you like this format or if you hate it, please send us a message to let us know. If you've got ideas for future topics or guests, we always love to receive those suggestions as well. Until next time, I'm Greg Schonefeld and we'll talk to you soon.