Forget about pandemic puppies. Meet the inflation chicken.

Forget about pandemic puppies.  Meet the inflation chicken.

Which shortage came first: the chicks or the eggs?

frightened by a Huge rise in egg prices, some consumers are taking steps to secure their own future supply. Demand for chicks that will become egg-laying hens, which increased with the onset of the global pandemic in 2020, is picking up again as the 2023 selling season begins, leaving hatcheries scrambling to keep up. up to date.

“Everybody wants the heavy layers,” said Ginger Stevenson, director of marketing for Murray McMurray Hatchery in Iowa. Her company has been running out of some especially prolific egg-producing breeds, in part because families are trying to hedge their bets against skyrocketing prices and limited availability of eggs.

“When we sell ourselves, it’s not like: Well, we can make another chicken,” he said.

McMurray’s experience is not unique. Hatcheries across the country report that demand is surprisingly strong this year. Many attribute the rise to high grocery prices, and in particular the rapid inflation of eggs, which in December cost 59.9 percent more than a year before.

“A lot of breeds are already sold out, most breeds, until the summer,” said Meghan Howard, who heads sales and marketing for the Meyer Hatchery in northeast Ohio. “It’s those egg prices. People are really worried about food safety.”

Google search interest in “raising chickens” has jumped noticeably from a year ago. The change is part of a larger phenomenon: A small but rapidly growing portion of the US population has become interested in growing and raising food at home, a trend that was nascent before the pandemic and has been strengthened by the pandemic. shortage it caused.

“As there are more and more shortages, more people want to raise their own food,” Stevenson observed one January afternoon, as 242 callers to the hatchery were on hold, presumably waiting to stock up on their own chicks. and accessories adjacent to the chicks.

Raising chickens for eggs requires time and initial investment. Brown egg laying chicks at McMurray’s cost about $4 a pieceand building cooperatives can cost hundreds or thousands of dollars.

Mandy Croft, a 39-year-old woman from Macon, Georgia, serves as an administrator in a Facebook group for new chicken farmers and is such an enthusiastic fan that her family members call her the “poultry princess.” . Even she cautioned that raising chickens may not save hobbyists money, but she said her group was seeing heavy traffic nonetheless.

“We get hundreds of requests a day for new members, and that’s because of the rising cost of eggs,” he said.

The surge in interest in poultry farming underscores how America’s first experience of rapid inflation and scarcity since the 1980s is fading. brands in society that can last after the cost increases have faded. And the chicken-and-egg story, one in which supply problems stacked up to create rapid inflation and inflict hardship on consumers, is something of an allegory for what has happened to the economy as a whole since 2020.

Prices for a wide variety of products have skyrocketed in recent years as unusually strong demand for goods, fueled by pandemic lifestyle changes and accumulated savings from stimulus checks, clogged global shipping lanes. and overwhelmed factories and other producers. Those problems have only been compounded by Russia’s war in Ukraine, which has disrupted the world’s food and energy supplies.

Food inflation has been particularly acute as grain supplies have contracted and costs of fuel, fertilizer and animal feed have skyrocketed. To make matters worse, bird flu began to ravage commercial chicken flocks early last year, sending egg prices up sharply. Highly pathogenic bird flu found on farms raise 58 million birds in 47 states as of January, according to the US Department of Agriculture.

“It’s just been one thing after another,” said Jayson Lusk, who heads the department of agricultural economics at Purdue University.

As problems escalate, some grocery stores have begun rationing egg supplies, limiting customers to one or two cartons each. And because eggs are a major ingredient in products including baked goods and mayonnaise, those price hikes have spread.

Egg prices have started to decline: the Department of Agriculture said this week that the average price of a carton of large eggs was just under $3.40, down from more than $5.00 earlier in the year.

But that’s still about double what a carton of eggs cost this time last year, and it could take months for prices to return to more normal levels. Commercial farms need time to rebuild their depleted stocks of laying hens, and changes in wholesale prices tend to happen faster than grocery store costs. Another possible headwind: Easter is approaching, which is likely to trigger a rebound in demand.

Meanwhile, the rush for eggs to raise chickens at home demonstrates how one shortage can turn into another: while hatcheries can theoretically hatch more chicks to meet increased demand, that’s proving difficult in today’s economy.

“Demand has increased, but we haven’t expanded in the last three years because we don’t have the workforce,” said Jeff Smith, one of the owners of the Cackle Hatchery in Missouri. He is paying more to try to attract workers, he said, but he believes there are simply no applicants in his area.

Nationwide, unemployment is at its lowest point in 50 years and there are 1.9 open positions for each unemployed applicant.

Due to rising labor and equipment costs, Mr. Smith is charging more. Retail chicks will cost 15 to 18 percent more this year, and wholesale prices will be 10 to 15 percent higher.

“One of our biggest cost increases is continuing to increase wages to compete,” Smith said, explaining that he is also paying more to help his employees deal with rapid inflation, and he thinks that will continue. “I don’t see inflation going anywhere.”

While inflation has been slowing annually for six months, price gains remain unusually fast. Federal Reserve policymakers are trying to slow down the economy and fight to get it back on track. the federal reserve raised rates to just over 4.5 percent this week, its eighth rate increase in the last year.

Fed officials typically look beyond grocery inflation when setting policy because food prices move for reasons they cannot control. But they are intended to prevent the kind of inflation Smith is referring to: price increases that stem from rising labor costs as employers try to cover inflation.

If wages and inflation feed off each other, it could keep inflation high, entrenching it in the economy in a way that could make it harder to eradicate. Central bankers say they see no signs of such a spiral for now.

And while central bankers typically wait only for unexpected shocks to deliver, such as the ones that drive up prices in the agricultural industry, they have recognized that it’s harder to do that when one-time outages last for years and build on each other.

That’s why central bankers have been responding to today’s rapid inflation by trying to control demand, the part that they can influence. By making borrowing and spending more expensive, the Fed discourages households from making big purchases and discourages trade expansions, which cools consumption and slows the job market. There are already signs that the price increases are beginning to abate.

But in the short term, part of inflation’s trajectory will depend on luck, not just Federal Reserve policy.

Eggs offer an example of why. While a more flexible labor market could reduce spending and make it easier for companies like Smith’s to expand, helping to rebalance supply and demand, that alone wouldn’t be enough to solve the nation’s poultry problems. Central bankers cannot determine when commercial farms outgrow bird flu.

When it comes to food in general, the war in Ukraine and other uncontrollable forces (drought, crop failure) will be key.

Jonathan Haines, a senior analyst at Gro Intelligence, which tracks global crops, said there were “glimps of hope in the coming year” for global food prices as supplies of eggs, vegetable oils, meat and other goods improved. basic. But heavy rains in California have slowed production of things like leafy greens and broccoli and could add to price pressure in the coming months.

“Things are starting to look up,” Haines said of food prices. “But they are still high relative to history.”

Whether the current situation leads to lasting changes in the way people obtain their eggs remains to be seen. He Team Chicago Roowhich rehoms unwanted hens and roosters, fears that the current surge in chick purchases could lead to people getting rid of adult birds later.

“We are incredibly concerned about this right now,” said Julia Magnus, co-founder of the group. There was a spike in “abandoned birds” after the first few purchases of the pandemic, and the group is “still dealing with the fallout.”

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