Two years after the worst bout of avian flu in U.S. history, poultry farms have fully restocked and rebuilt egg supplies. But lagging demand has led to a glut that is crippling farmers, The Wall Street Journal reported.
Egg prices are closing in on a decade low, and while that's good news for breakfast fans, it's left egg suppliers including Cal-Maine Foods Inc (CALM) - Get Report posting annual losses for the first time in years.
"We do not expect to see any meaningful improvement until there is a better balance of supply and demand," said Cal-Maine CEO Dolph Baker. Cal-Maine said the average price of an egg sold to its customers tanked 42% over the last year.
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The price of one dozen large shell eggs at wholesale in the Midwest was 98 cents last week, according to research frim Urner Barry. That's a 62% drop in price over the last two years. Wholesale prices for a dozen eggs haven't topped $1 all year.
The 2015 bird flu outbreak killed 34 million egg-laying hens, sending prices up and driving producers to refill barns as quickly as possible. When the demand for all-day breakfast options and protein-packed meals waned and wholesale buyers found alternatives to eggs, the farmers were left with a record 319 million egg-laying hens and no one to buy the bounty.
Cal-Maine stock is up 2% Friday morning, but has traded down 12% since the start of the year.
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