How Recall of 20 Million Eggs Could Affect US Prices
"This is not good news," North Carolina State University economist Mike Walden told Newsweek. "Lower egg supply will increase egg prices."
Walden estimated that the recall could see prices rise by 25 percent across the affected regions.
The price of eggs, already seen by many as a barometer of inflation, has become a political flashpoint this year. President Donald Trump blamed the increase on Joe Biden's policies before taking credit for the more recent price plunge.
Widespread outbreaks of avian flu took a significant toll on production, leading to nationwide shortages and pushing prices up to record highs. While far more contained, the latest recall, prompted by fears over salmonella contamination and impacting nine states, could offset some of the declines in cost that have been seen since March.
On June 6, August Egg Company announced a voluntary recall of the brown cage-free and certified organic brown eggs over fears of salmonella contamination.
According to the U.S. Food and Drug Administration (FDA), the eggs were sold by multiple brands, including Walmart, between February and May across nine states: Arizona, California, Illinois, Indiana, Nebraska, Nevada, New Mexico, Washington and Wyoming.
The Centers for Disease Control and Prevention (CDC) said the eggs could be tied to the salmonella outbreak that has infected 79 people so far this year, and that FDA inspections at the August Egg Company found that samples of salmonella found in the eggs were "closely related" to those seen in the human cases.
"The true number of sick people in this outbreak was likely much higher than the number reported," the CDC said, "and this outbreak may not have been limited to the states with known illnesses."
Joseph Balagtas, professor of agricultural economics at Purdue University, told Newsweek that the impact of the recall on prices would likely be limited, given the 20.4 million affected eggs represent "tiny fraction" of the more than 8 billion produced each month. For context, he said that the price spikes earlier this year were a result of an egg production shortfall of about 1 billion because of outbreaks of highly pathogenic avian influenza (HPAI) in February.
He added that any noticeable upward pressure on prices would likely be masked by the recent decline in the cost of eggs in the U.S. According to the Consumer Price Index reading released by the Bureau of Labor Statistics last week, egg prices dropped 2.7 percent in May, following a 12.7 percent decline in April. However, prices are still up 41.5 percent from the same time last year.
August Egg Company, in its recall announcement: "It is important to know that when our processing plant identified this concern, we immediately began diverting all eggs from the plant to an egg-breaking facility, which pasteurizes the eggs and kills any pathogens.
"August Egg Company's internal food safety team also is conducting its own stringent review to identify what measures can be established to prevent this situation from recurring. We are committed to addressing this matter fully and to implementing all necessary corrective actions to ensure this does not happen again."
Joseph Balagtas, professor of agricultural economics at Purdue University, told Newsweek: "By removing eggs from the market, the recall will put some upward pressure on prices. But I expect the magnitude of the price effect to be small, perhaps imperceptible in the context of day-to-day fluctuations in prices."
August Egg Company said that it has stopped selling fresh shell eggs for the time being and urged consumers to return those with the plant code numbers listed in its recall to the place they were purchased for a full refund.
The plant code numbers for the recalled eggs can be found printed on the package and are P-6562 or CA5330 with Julian Dates from 32 to 126, the FDA said. The Julian Dates are codes of three to seven digits and represent the date that the food was packaged or manufactured.
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