When will Soaring Egg Prices Come Down?

Last Week’s Moves 

Corn 683-6  (+2.63%)  |  Soybeans 1535-2 (+3.02%)  |  SRW Wheat 752-4 (+4.51%)

KC Wheat 873-6 (+6.68%)  |  Live Cattle 163.350 (+1.74%)  |  Lean Hogs 86.525 (+1.26%)

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Welcome to your weekly agriculture report, where we cover everything you’ll need to know for the week ahead. This week, egg prices remain high, the global food supply remains at risk, and extreme weather conditions impact Argentina's crops. 

Egg-stremely High Egg Prices Continue Into 2023

Across all egg types, consumers saw average egg prices jump 60% last year — among the largest percentage increases of any U.S. good or service.  The price of eggs was up 138% in December from the year prior, to $4.25 a dozen, according to the Bureau of Labor Statistics.

• Don’t put all your eggs in one basket… Egg producers and food economists attribute the surge in price to the nationwide bird flu outbreak which caused supply chain challenges.​​  The U.S. suffered its deadliest outbreak of bird flu in history in 2022.
   
• The plot chickens… Farm Action, a farmer-led advocacy group,  sent a letter urging the FTC “to promptly open an investigation into the egg industry, prosecute any violations of the antitrust laws it finds within, and ultimately, get the American people their money back.” 
   
• The inside s-coop on when prices will fall… The USDA predicts egg prices will begin dropping as the industry moves past the holiday season and as it continues to rebuild its flock.

Global Food Suppl Remains At Risk… 

Although fertilizer and crop prices have fallen sharply since their peaks, agriculture specialists and analysts have warned that the world’s food supplies are still under threat.  The latest data from the FAO marks 29.3% of the entire world population to be moderately or severely food insecure, with 40% of this population experiencing severe food insecurity.

• War puts a strain on supplies… Russia is both a top wheat and fertilizer supplier, and the war in Ukraine has caused a surge in prices for food, energy, and fertilizer.  
   
• Surge spawns search for a substitute… The surge in global energy prices last year led governments to accelerate domestic energy production including nuclear, renewables, hydropower, and coal.  BP expects primary energy consumption in 2035 to be lower by 2% compared with last year's outlook.
   
• Fertilizer forecasts… Fertilizer prices have gone down but will likely rise as planting season approaches.  Farmers may decide to use less fertilizer to conserve costs, which could reduce crop yields in upcoming harvests.

Unpredictable and extreme weather has added to concerns about the global food supply, especially in Argentina, the world’s largest soybean oil and soybean meal exporter.

• Damaging drought… Argentina has battled drought, which has damaged soybean and corn crops and delayed plantings. Recent rain prevented more cuts to harvest forecasts, but dryness is again forecast in the coming week.
   
• Fading forecast… 2023 may see a fading of the La Niña weather pattern that contributed to dry conditions in both North and South America.  According to Bloomberg, the lingering La Nina phenomenon has a 73% chance of fading by April.  This would mildly increase the chance of a large U.S. corn crop, but concerns remain.  

What else you need to know… 

• Have you heard?… The U.S. Senate Agriculture Committee has set the dates for several 2023 Farm Bill hearings.  The first hearing is scheduled for this Wednesday and will focus on "trade and horticulture."
   
• Payment for production projects… The U.S. Department of Agriculture (USDA) is making available up to $7.5 million for grants through its Office of Urban Agriculture and Innovative Production (OUAIP).  The competitive grants will support the development of urban agriculture and innovative production projects. 
   
• Corn concerns continue… Mexico has failed to satisfy the “grave concerns” of the United States over a potential ban on imports of U.S.-grown GMO corn.  The ban would take effect in January 2024.

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input.  

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