| WASHINGTON, June 14
WASHINGTON, June 14 U.S. wholesale egg prices
increased a record 41.6 percent in May, driven by an avian flu
outbreak in Mexico that boosted U.S. egg exports to that
The jump in egg prices, which followed a 13.1 percent
decline in April, accounted more than 60 percent of a 0.6
percent increase in U.S. wholesale food prices last month, the
Labor Department said on Friday. The food price gain helped push
up overall producer prices by 0.5 percent.
Sheldon Garvida, a poultry and dairy industry analyst with
the department's Bureau of Labor Statistics, said Mexico has
struggled to combat an outbreak of the highly contagious avian
virus that has infected millions of chickens.
"That's aggravated by the fact that Mexicans are the world's
number one egg consumers per capita," said Garvida.
Mexico has culled 4.2 million chickens this year in an
attempt to contain the outbreak. The World Organization for
Animal Health reported several newly infected farms in central
Mexico beginning in April and May.
U.S. egg exports to Mexico for the first four months of the
year reached 12.9 million dozen, almost 27 times greater than
the amount exported during the same period last year.
"Mexico is an important trade partner, and the avian flu
crisis represents an additional squeeze," said Nathan Kauffman,
an agricultural economist at the Kansas City Federal Reserve
Bank. Expectations that the avian flu crisis will continue may
put additional pressure on prices, he said.
The BLS, however, cautioned against reading too much into
the outsized price jump, noting that the combination of low
domestic supply and high export demand for eggs occurred in a
month when prices typically fell.
This threw off the model that the BLS uses to smooth out
seasonal fluctuations in data.
"There is a large seasonal component to that number," Joseph
Kowal, an economist with the BLS.
Unadjusted for seasonal variations, wholesale prices rose a
more-moderate 15.9 percent. Kowal said this was the increase
that producers pass along to shoppers at the grocery store.
Prices were also pushed up by the forced molting of hens,
which temporarily depressed supply, according to Garvida, the
poultry and dairy analyst.
During the molting "rejuvenation process" hens are fed less,
causing them to loose their feathers. They do not lay eggs
during this time, but afterward the hens lay larger eggs faster.