Egg prices in the United States have reached record levels, and the Department of Agriculture is now trying to find solutions by analyzing how other countries produce eggs. They don’t have to look far: just across the border, there are abundant and affordable eggs.
Eggs have become such a precious commodity in the USA that they attract the attention of organized crime. Meanwhile, Canadians have plenty at the usual price.
"We haven't had any shortage of eggs. We can choose from 14 different types of eggs," says Mike von Massow, a food economist at the University of Guelph, Ontario.
It's a stark contrast to the situation in the USA, where avian flu and efforts to contain it have destroyed tens of millions of chickens, forcing some supermarkets to limit egg purchases and prompting restaurant chains like Denny's and Waffle House to add a surcharge for egg dishes, notes NPR.
Almost 158 million birds have been culled in the USA since the beginning of the epidemic. It is one of the longest-lasting avian flu epidemics, with the first outbreak confirmed in the USA in February 2022.
The epidemic has spread to over 970 flocks in 17 states, causing significant disruptions in the supply chain. Over 40 poultry farms in the USA had flu outbreaks in January and February, resulting in a loss of over 28 million chicks, according to USDA figures analyzed by the Wells Fargo Agri-Food Institute. This means that approximately 9% of egg-laying poultry have disappeared in just two months.
Why Canada Doesn't Have Problems
Canadian chickens can also get avian flu, just like their American counterparts. But the impact on Canada's egg supply has been limited so far.
Von Massow suggests a few explanations for this situation. The weather is colder in Canada, so the barns are more airtight, protecting the chicken flocks from the flu virus carried by wild birds. Canada also has fewer free-range chickens, which are more exposed to infections.
But perhaps the most significant difference is that poultry farms in Canada are much smaller. Therefore, when an outbreak occurs on a farm, the effects are more limited.
A typical farm in Canada has around 25,000 laying hens, while many farms in the USA have over a million. This means that American farmers have actually put many more eggs in a relatively small number of baskets— in other words, they are taking on a higher risk.
What Happens When You Put All Your Eggs in One Basket
American poultry farms have not always been so large. Since the late '90s, the average US farm has grown fourfold, according to a paper co-authored by economist Jada Thompson from the University of Arkansas. This is partly due to competitive pressure in the American market to produce cheap food, forcing farmers to compensate by increasing volume.
"These companies don't make much on each egg. They sell a lot of eggs," explains Thompson.
Many US farms rely on automated equipment that requires a large number of birds to operate efficiently. Most of the time, this industrialized farming model offers cost savings to consumers. Eggs are usually cheaper in the USA than in Canada.
But there are also trade-offs, as the avian flu outbreak has shown. "If a disease occurs, you have a much larger population that is affected," says Thompson.
When avian flu is discovered on a poultry farm, all birds are killed to limit the spread.
It takes at least six months for new chicks to replace those laying hens. In the meantime, egg supply in the USA will remain under pressure. While wholesale egg prices have dropped in recent weeks, Easter is approaching, and the holiday typically brings a seasonal spike in egg demand.
The Advantage Americans Don't Have
So, what has led Canadian egg producers to remain on relatively small farms? Von Massow points out the supply management system in Canada, which guarantees even small farmers sufficient income to stay in the market.
"There is less incentive to grow because they can make money at this level. There is still an incentive to be efficient. But there is no requirement to become so large," he says.
To keep their small farms viable, Canada also restricts imports of agricultural products from the USA, such as eggs and dairy, which has been a source of friction in the current trade war triggered by Donald Trump.
Despite this economic conflict, the American government has a possible solution to meet demand and prevent egg price hikes: a temporary increase in imports.
T.D.