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Ohio Ag News Headlines
Egg Price Drop Good for Consumers, Tough for Producers
Ohio Ag Connection - 07/17/2017

In Darke County, the state's highest producer of eggs, some businesses are anxiously trimming their flocks to contend with the steep dive in nationwide egg prices.

Shoppers may be thrilled to see a dozen eggs as low as 49 cents, but egg producers in Darke County likely are cringing at the price, the lowest in at least a decade.

By reducing their flocks, some Ohio egg producers hope to dwindle the supply of eggs on the market and drive up the price they get paid for eggs. The Buckeye state is second in the nation in egg production, just behind Iowa.

The dip in egg prices stems from a nationwide glut of eggs on the market. In 2015, an avian influenza outbreak forced many farmers in Iowa, Minnesota and Nebraska to destroy millions of their infected birds. With fewer hens laying, the supply declined, and the price of eggs skyrocketed. Producers then took on more birds to try to take advantage of the high egg prices. In time, with so many hens producing, the egg supply surged, dropping the price per dozen. Egg prices fell by 21 percent in 2016, and this year, egg prices are expected to decline an additional 5 to 6 percent, according to the U.S. Department of Agriculture.

"What comes up, must come down and vice versa," said ZoŽ Plakias, an agricultural economist with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.

"Anytime you have a market disruption, it takes time to adjust," Plakias said referring to the 2015 avian influenza outbreak. "This is a kind of perennial story in agriculture. It's hard to control all the different factors to always give producers the price they want."

In Darke County, some egg producers have stopped replacing their aging hens that go out of production to lower the number of eggs on the market. Some farmers that raised cageless hens, expecting they would lay eggs that sell for $4 a dozen, have slowed the expansion of that practice, given the minimal demand for the pricey cageless eggs, said Sam Custer, an Ohio State University Extension educator. OSU Extension is the outreach arm of the college.

"I don't recall a time when it's gotten this ugly," he said.

Since the winter of 2016, it has been tough for egg producers, with the exception of Christmas and Easter, when the industry typically experiences boosts in egg sales, Custer said.

The national average price of eggs was $1.68 in May 2016, and in May 2017, the price declined to $1.41, a 16 percent decrease, according to the Bureau of Labor Statistics. Prices vary across the country. Some grocery stores in Ohio have recently featured eggs priced as low as 49 cents a dozen.

When the price of milk dips significantly, dairy farmers sometimes take the drastic measure of dumping some of their milk to reduce the supply and help drive up the price, Custer said. Egg suppliers, however, won't be pitching their product, he said.

"But right now," Custer said, "they're truly just hanging on."

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