NEC-Led Task Force on HPAI/Egg Prices to Confront Hurdles, Challenges

NEC-Led Task Force on HPAI/Egg Prices to Confront Hurdles, Challenges

USDA, other agency and industry analysts consulted

National Economic Council (NEC) Director Kevin Hassett is working with industry experts and government analysts and officials, including those at USDA. Ag Secretary Brooke Rollins late Thursday heard from various experts on the topic. The emergence and spread of new avian influenza variants have significantly impacted egg prices, poultry production, and resulted in public health concerns, necessitating ongoing vigilance and adaptive strategies from both the industry and government agencies. Some of the issues:

Background. Bird flu was present during the first Trump administration (2017-2021). Several notable events related to avian influenza occurred during this period:

Outbreaks in 2017

In March 2017, an outbreak of highly pathogenic avian influenza (HPAI) H7N9 virus was detected in two commercial chicken breeder flocks in the United States.
This North American lineage HPAI H7N9 virus was genetically unrelated to the Asian lineage HPAI H7N9 viruses reported in China.

Policy Continuation
· A USDA bird flu response plan, updated in May 2017 during Trump's first administration, incorporated policy guidance based on lessons from influenza outbreaks during the Obama and first Trump administrations. The plan stated that "rapid depopulation of infected poultry is critical to halt virus transmission and must be prioritized.”

Depopulation Strategy

During a March 2017 bird flu outbreak, a USDA report indicated that "nearly 253,000 birds were depopulated.”
This depopulation strategy was a continuation of long-standing practices to prevent bird flu from spreading, as confirmed by agriculture experts.

Of note: While bird flu was present during Trump's first term, the current widespread outbreak affecting cattle and causing human infections began in 2022, after Trump left office. The ongoing situation presents new challenges for the incoming Trump administration in 2025.

The Biden administration faced significant bird flu outbreaks during its tenure, with the H5N1 virus causing widespread impacts across the United States. Here's an overview of the outbreaks and the actions taken:

Outbreaks

The current H5N1 outbreak began in 2022 and intensified throughout the Biden administration.
By early 2025, the virus had affected over 130 million birds, including both wild and domestic populations.
The outbreak expanded to dairy cattle, with 925 dairy herds across 16 states infected by October 2024.
Human cases were reported, with 67 confirmed cases and one fatality in the U.S. by early 2025.

Actions taken. The Biden administration and then USDA Secretary Tom Vilsack implemented several measures to address the outbreak:

Funding and Resource Allocation

By January 2025, the administration had spent approximately $1.8 billion battling bird flu since the spring of 2023.
An additional $306 million was allocated in early 2025 for various response efforts.
In May 2024, nearly $200 million was provided to contain the outbreak, with $98 million for dairy farms and $101 million split between the FDA and CDC.

Testing and Surveillance

USDA implemented a Federal Order in May 2024 requiring testing of cattle before interstate movement.
In December 2024, a new mandate was announced to test the national milk supply for bird flu.
Enhanced testing and monitoring strategies were planned to better assess the presence of H5N1.

Biosecurity Measures

Vilsack emphasized the importance of improved biosecurity as a key strategy to limit the spread of H5N1.
USDA announced assistance for producers with H5N1-affected premises to improve on-site biosecurity.

Interagency Cooperation

USDA worked closely with the FDA on lab testing and with the CDC on public health matters.
A response team including four HHS agencies (CDC, FDA, NIH, and ASPR) was established to work with USDA. (ASPR is the Administration for Strategic Preparedness and Response.)

Public Health Initiatives

Funds were allocated to enhance hospital readiness and conduct research on therapeutics, diagnostics, and vaccines.
Local jurisdictions received funding to increase monitoring of high-risk populations, such as livestock workers.

Bottom line: The above actions demonstrate the Biden administration's multifaceted approach to addressing the H5N1 outbreak, focusing on containment, research, and protection of both animal and human health. However, despite these efforts, the outbreak expanded to dairy cattle, with 925 dairy herds across 16 states infected by October 2024. Human cases continued to occur, with 67 confirmed cases and one fatality by early 2025. Critics argued that the Biden administration's response was not swift or comprehensive enough.

Vaccines. They are seen as impractical but could be used in targeted areas. Most available vaccines for avian influenza in chickens are administered through injection. This method, while effective, can be time-consuming and stressful for the birds, especially in large-scale poultry operations.

Currently, there are limited options for vaccinating chickens against bird flu via feed or water, but research is ongoing to develop more convenient methods of vaccine administration (more details below).

New variants. The disease is a moving target. USDA under then Secretary Tom Vilsack conditionally approved a vaccine made by Zoetis, containing a killed version of an H5N2 variant designed to work against circulating H5N1 variants. However, the effectiveness of vaccines may be compromised as new variants emerge, potentially requiring frequent updates.

Vilsack, during his tenure as USDA Secretary, took several steps regarding HPAI vaccines, but the situation has evolved over time:

Vaccine approval and funding. In 2016, Zoetis received a conditional license for its H5N1 vaccine and a contract award for the USDA's National Veterinary Stockpile. This vaccine was approved under Vilsack's leadership, as he served as USDA Secretary from 2009 to 2017, and then again from 2021 until Jan. 2025.
Vaccine fate. The Zoetis H5N1 vaccine approved in 2016 remained in the National Veterinary Stockpile until 2021 but was never used. This suggests that the vaccine was eventually discarded or removed from the stockpile without being deployed.
In August 2024, Vilsack authorized the first field trial of an H5N1 vaccine for cattle.

Of note: As of February 2025, Zoetis received a conditional license from USDA for its Avian Influenza Vaccine, H5N2 Subtype, Killed Virus, for use in chickens.

USDA has allocated significant funding for HPAI response:

In May 2024, Vilsack approved the transfer of $824 million from the Commodity Credit Corporation to the Animal and Plant Health Inspection Service (APHIS) for HPAI response efforts. This was in addition to a previous approval of $1.3 billion in emergency funds to tackle nationwide HPAI detections.
Former USDA Secretary Vilsack revealed that USDA was accelerating vaccine production for bovines, with seven potential vaccine candidates in development.

While not yet widely available, some alternative methods for vaccinating chickens against bird flu are being explored:

Spray vaccination: Some researchers have evaluated immune responses in chickens vaccinated via coarse spray with adenovirus-vectored avian influenza vaccines. This method shows promise for mass immunization of poultry, potentially eliciting both systemic and mucosal immune responses.
Drinking Water: As of now, there are no available vaccines that can be delivered through drinking water for avian influenza. However, this route of administration is being researched as a potential method for mass vaccination.
Aerosol/Spray: Only one vaccine is currently available for aerosol/spray administration. This method could potentially allow for easier mass vaccination of poultry flocks.

Challenges. The development of vaccines suitable for mass application methods outside hatcheries, such as via drinking water or spray/aerosolization, is still in progress. These methods would greatly simplify the vaccination process for large-scale poultry operations. Researchers are working on various approaches to make vaccination more practical:

Vectored vaccines: Some vaccines use viral vectors, like adenoviruses, to deliver avian influenza antigens. These may be more amenable to alternative administration routes.
Mucosal immunity: Spray and aerosol methods are being explored to target mucosal immune responses, which could provide better protection against respiratory infections like avian influenza.

Of note: While progress is being made, as of now, most approved and effective vaccines for avian influenza in chickens still require injection. The development of feed- or water-based vaccines remains an active area of research in the poultry industry.

Another issue: Changing variants of avian influenza significantly impact the egg price situation and overall poultry industry. Here's how:

Emergence of New Genotypes. A new genotype of avian influenza, D1.1, emerged in wild migratory birds in September 2024 and subsequently spread to domestic poultry. This new variant has had severe consequences:

Increased spread across North America's four migratory waterfowl flyways.
Spillover into poultry, humans, and even cows.
Caused a severe flu case in British Columbia and a death in Louisiana.
Scientists announced they found D1.1 in infected dairy cattle in Nevada for the first time. A dairy farm worker tested positive for H5N1, the state’s first reported human case.
Some scientists fear the D1.1 variant carries a new mutation that helps the virus copy itself more easily onto the cells of mammals, including humans.
Some scientists suspect a new strain is spreading via dust from bird droppings, carried by the wind.

Impact on Poultry and Egg Production. The emergence of new variants has led to:

More than 20 million egg-laying chickens in the U.S. died in the last quarter due to the bird flu outbreak. This figure includes both chickens that died from the virus and those that were culled to prevent further spread of the infection. This recent toll represents the most severe impact on America's egg supply since the outbreak began in 2022.
Reduction in the conventional egg-laying flock by 3.7% in January 2025 alone.
Significant drop in egg production, falling to 9.1 billion dozen in 2022 from 9.4 billion dozen in 2019.
The losses have affected all major production systems, including conventional caged, cage-free, and certified organic types (with some major differences as noted below).
Egg prices have soared to their highest levels in years, largely driven by the virus (details below).
The U.S. egg industry now has 8% fewer egg-laying hens than it did three years ago.
The federal government has allocated substantial funds to compensate farmers, with USDA spending $1.25 billion on payments to farmers since the outbreak started in 2022.
New bird flu outbreaks have also struck major egg-laying operations in Indiana and Georgia, leading to heists of the precious commodity and the sight of empty supermarket shelves where cartons of eggs should be.
New York Governor Kathy Hochul recently ordered all live-bird markets in New York City and some surrounding areas to shut down for a week to stem the spread of the virus. Three ducks at the Queens Zoo died of bird flu and as many as 12 birds at the Bronx Zoo that died after possible exposure are being tested for the virus.

The bird flu outbreak has significantly impacted the availability of organic and cage-free eggs, though in some unexpected ways:

Impact on Organic Egg Production

Less affected: Organic egg production has been less impacted by the bird flu outbreak compared to conventional egg production.
Smaller flocks: Organic egg-laying hens typically live in smaller flocks with more spacious conditions, which may contribute to their lower infection rates.
Price stability: Organic egg prices have been relatively more stable due to different pricing practices, with producers often setting long-term strategic prices with retailers.

Cage-Free Egg Availability

Disproportionate impact: Despite representing only about a third of U.S. egg layers, cage-free hens contributed to nearly 60% of all bird flu cases in 2024.
Supply challenges: The disproportionate impact on cage-free flocks has led to significant supply issues, especially in states with cage-free egg laws.
Recovery difficulties: Rebuilding cage-free flocks can be more challenging due to fewer sources and stricter regulations in some states.

Market Dynamics

Pricing anomalies: In some areas, like New York City, organic and cage-free eggs have been priced lower than conventional eggs due to existing contracts.
Potential price increases: As contracts expire, prices for organic and cage-free eggs may increase significantly.
State regulations: Nine states, including California and Colorado, have laws requiring eggs to be from cage-free hens, further complicating supply issues.

Other issues:

Cage-free transition: About 40% of U.S. commercial egg layers are now in cage-free systems, up from just 30 million in 2015.
Supply/demand imbalance: The growth in cage-free egg demand has outpaced supply, exacerbated by bird flu outbreaks.
Bottom line: While organic eggs have been somewhat less affected by the bird flu outbreak, cage-free egg production has faced significant challenges. This has led to complex market dynamics, including unexpected pricing patterns and potential future shortages, particularly in states with cage-free egg laws.

Economic and Trade Implications. Changing variants can affect international trade and economic stability:

The presence of highly pathogenic avian influenza (HPAI) restricts international trade in live birds and poultry meat.
New variants may lead to more stringent trade restrictions, further impacting national economies.

Human Health Concerns. As the virus evolves, there are increasing concerns about human health:

The D1.1 genotype has infected humans, with 68 confirmed cases and one fatality in the United States.
Experts worry that as the virus replicates, the chance of a mutation allowing human-to-human transmission increases.

Egg prices in the United States have reached unprecedented levels, with the average cost of a dozen Grade A eggs hitting a record high of $4.95 in January 2025, but prices in individual states and stores can be much higher or lower. This represents a significant increase from previous years, with prices nearly doubling since 2024. The surge in egg prices has been particularly dramatic, with a 15% increase from December 2024 to January 2025 alone.

Several factors have contributed to the soaring egg prices:

Avian influenza outbreak: The primary driver of the price increase is an ongoing outbreak of highly pathogenic avian influenza (HPAI) that began in 2022. This outbreak has led to the culling of millions of chickens, significantly reducing the egg-laying population.
Supply chain disruptions: The bird flu epidemic has caused severe disruptions in the egg supply chain, with the population of conventionally caged chickens reduced by 8%.
Supply/demand imbalance: Consumer demand for eggs has remained steady despite the price increases, contributing to the supply-demand imbalance.
Shift in consumer preferences: There has been a growing preference for specialty eggs, such as cage-free and organic varieties, which are typically more expensive.
State Regulations: Some states, like California, have implemented stricter regulations requiring eggs to be sold from cage-free hens, further impacting prices.

Impact on consumers and businesses. The egg price surge has had widespread effects:

Grocery store limitations: Some grocery chains, including Trader Joe's and Kroger, have placed limits on the number of eggs customers can purchase.
Restaurant surcharges: Restaurants like Waffle House have implemented per-egg surcharges to offset the increased costs.
Regional price variations: Prices vary significantly by region, with some areas seeing even higher costs. For example, in California, a carton of two dozen eggs can cost $13.49.

Egg price outlook. USDA predicts that egg prices could rise by up to 20% in 2025. The duration of high prices remains uncertain, as it depends on controlling the spread of avian flu and replenishing the egg-laying chicken population. Experts suggest it may take at least another three to six months before prices begin to moderate. But some analysts say if a way can be found to deal with HPAI, egg prices would tumble. As consumers grapple with these high prices, some are adapting by reducing egg consumption or seeking alternatives. The situation continues to evolve, with both political and economic implications as the country faces this ongoing challenge in the food supply chain.

Does the U.S. import and export eggs? Yes. U.S. egg export and import figures:

Exports. Total egg exports from the U.S. in 2024 amounted to 172.8 million dozen eggs. This figure includes both table eggs and egg products (converted to shell egg equivalent). Breaking this down further:

Table egg exports: 84.3 million dozen
Egg product exports: 24,834 metric tons
The total value of egg exports in 2024 was $314.2 million, an increase of 5.9% compared to 2023.
In 2023, the U.S. exported $144.9 million worth of eggs, making it the 6th largest exporter globally. The U.S. maintains a positive trade balance in eggs, with exports exceeding imports by $139.6 million in 2023.

Imports. In 2023, the U.S. imported $110.15 million worth of eggs, primarily from Canada, the Netherlands, and the United Kingdom.

Of note: The U.S. generally is a net exporter of eggs, with exports significantly outweighing imports.

The top egg-exporting countries globally in 2023 were:

Netherlands: $610.1 million (20.5% of global egg exports)
Poland: $463.4 million (15.6%)
Turkey: $224.5 million (7.5%)
Mainland China: $222.8 million (7.5%)
Germany: $181.5 million (6.1%)

The import of eggs into the U.S. is subject to strict regulations, including requirements for USDA import permits, veterinary health certificates, port inspections, and import quarantines. These measures ensure the safety and quality of imported eggs entering the U.S. market.

The U.S. gov’t has several potential options to address the rising egg prices:

Regulatory Actions

Investigate price gouging: The Federal Trade Commission (FTC) could investigate potential antitrust violations or price gouging in the egg industry. Some lawmakers have urged the FTC to probe egg producers for potentially coordinating efforts to restrict supply and sustain inflated prices.
Ease FDA regulations: The National Chicken Council (NCC) has petitioned the FDA to modify policies that force the broiler industry to destroy safe, nutritious eggs. Relaxing these regulations could increase egg supply and potentially lower prices. The issue stems from a 2009 FDA rule known as the Shell Egg Rule, which requires all shell eggs to be refrigerated at or below 45°F within 36 hours of being laid. This rule, intended for table eggs, inadvertently affects surplus broiler hatching eggs. Broiler eggs intended for hatching must be stored at 65°F for up to five days before determining which eggs are needed for hatching. This process is incompatible with the FDA's refrigeration requirements, forcing the broiler industry to discard surplus eggs instead of sending them to egg breakers for processing into liquid egg products.

The NCC has requested FDA to: Exercise enforcement discretion to allow surplus broiler eggs to be processed into egg products under USDA Food Safety and Inspection Service (FSIS) jurisdiction; Exempt surplus broiler hatching eggs intended for breaking from the refrigeration requirements in the Shell Egg Rule. NCC argues that the current policy results in significant waste, costing the broiler industry over $27 million annually. Allowing these eggs to be used would help alleviate egg shortages and high prices, especially during events like the recent highly pathogenic avian influenza (HPAI) outbreak. The eggs would be safe for consumption as they would be pasteurized during processing, which is effective in controlling Salmonella.

As of February 2025, FDA has not yet granted the NCC's request. The FDA denied a similar request on June 12, 2023, stating that the proposed action would not maintain the same level of public health protection as the current egg safety rule.

Policy Interventions

Address avian flu outbreak: The government could allocate more resources to combat the ongoing bird flu crisis, which has significantly impacted poultry populations and egg production since 2022.
Implement price controls: While controversial and unlikely under the Trump administration, the government could consider temporary price controls on eggs to limit further increases.
Increase imports: Easing restrictions on egg imports could help supplement domestic supply and potentially lower prices.

Economic Measures

Provide subsidies: The government could offer subsidies (incentives) to egg producers to offset increased production costs and encourage greater supply.
Offer consumer relief: Implementing targeted financial assistance or tax credits for low-income families could help offset the impact of high egg prices.

USDA has several potential measures to stabilize egg prices:

Enhance biosecurity: Promote and enforce stricter biosecurity measures across poultry farms to prevent the spread of highly pathogenic avian influenza (HPAI).
Increase surveillance: Improve monitoring and early detection of HPAI outbreaks to minimize their impact on egg production.
Investigate price gouging: Collaborate with the Federal Trade Commission and Department of Justice to scrutinize potential anti-competitive practices in the egg industry.
Enhance price discovery: Implement new regulations to improve fairness and transparency in pricing mechanisms for poultry farmers.
Promote competition: Support smaller egg producers and encourage market diversification to reduce reliance on large conglomerates.
Expedite flock replacement: Facilitate faster repopulation of laying hen flocks after HPAI outbreaks.
Address labor shortages: Develop programs to alleviate workforce issues in the egg industry that hamper production.
Ease import restrictions: Consider temporary measures to increase egg imports and supplement domestic supply.
Implement purchase limits: Encourage retailers to set temporary limits on egg purchases to prevent panic buying and ensure fair distribution.
Monitor retail practices: Scrutinize grocery stores' pricing strategies and promotional activities to prevent unjustified price hikes.
Invest in research: Fund studies on HPAI-resistant poultry breeds and alternative production methods to increase resilience in the egg industry.
Improve forecasting: Enhance data collection and analysis to better predict and prepare for future supply chain disruptions.

Challenges and limitations. Government intervention in markets can have unintended consequences. Additionally, some factors contributing to high egg prices, such as inflation and increased production costs, may be beyond the government's immediate control. President Donald Trump, who campaigned on promises to lower food prices, is facing pressure from lawmakers to act. However, no specific plan has been announced to address the egg price crisis, but NEC Director Kevin Hassett has signaled that a plan is coming.