The chicken or the egg: Eggs are the latest food item to suffer supply chain disruption

Inflation and old production equipment can in part explain why we’ve seen shortages on shelves since COVID started.

By Sarah AschJanuary 17, 2023 11:45 am, ,

Texans going to the grocery store recently might have noticed the cost of eggs has doubled in the past couple of weeks.

But eggs aren’t the first item to see shortages or price spikes since the COVID-19 pandemic started almost three years ago. 

Justin Benavidez, a livestock economist for Texas A&M AgriLife, said the throughline factor for much of this price increase is inflation.

“There are a lot of things that have been impacting our entire supply chain. And food is not the only thing that has seen that inflation,” he said. “Fuel is more expensive. Feed for animals is more expensive and fertilizer’s more expensive. So that certainly impacts the cost of doing business for farmers and ranchers.”

Another factor is that farming infrastructure in the United States is largely outdated, he said. 

A lot of our food processing infrastructure beyond the farm gate was built in the ’70s and ’80s,” he said. “We had some of those kickbacks from the pandemic in which people were demanding a lot of food and restructuring the food supply system to eat at home. Some of the food processing infrastructure was running on high on really kind of outdated machinery. And so there were some disruptions in terms of manufacturing.”

Other food shortages and price spikes are also exacerbated by factors unique to that item, Benavidez said. 

“When we think about eggs, for instance, high pathogenic avian influenza took out 10% or 11% of our layer flock in the United States in the last year. That’s a very unique aspect just to the poultry market,” he said. “So there are some throughlines, but there are specific market factors that affect each type of food you see at the grocery store, too.”

So can grocery shoppers expect to see continued disruption in the food market? 

Benavidez said as long as inflationary pressure continues on the economy, he expects to see it impact the food supply chain. Even so, some food items aren’t seeing consistently rising prices. The price of beef, for example, was lower in December than it had been the year before. 

“So some food products are coming down and those specific market factors are driving different food products lower,” he said. “But the inflationary pressure that is leading to higher costs in the industry across the board – not just the farm and ranch level, but also at the grocery level in terms of higher labor costs – those things may stick around for a little while longer as long as inflation is part of our economy.”

Benavidez recommended shoppers take advantage of good deals on non-perishables and stock up on items to put in the freezer to help reduce the impact of inflation on their budgets. 

And while he’s unsure what, if anything, will be done about rising food costs during the Texas Legislative session, Benavidez said he expects it to be a conversation. 

I think that every legislature, as well as the federal government, will have questions about what led to the increase in the cost of food and the increase in the cost of fiber,” he said. “I certainly expect there to be questions about what led to some of this rising cost of food and what in the supply chain might need something addressed in terms of fixes or adjustments to prevent these kinds of fluctuations in the future.”

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