Economist expects an increase in egg prices if bird flu worsens in Colorado

What came first: the chicken or the cow? When talking about bird flu, the answer is chickens.

According to the Colorado Department of Agriculture , more than 8 million birds have been affected by highly pathogenic avian influenza (HPAI) since the outbreak began in early 2022. The virus was detected at Colorado dairy farms in late April 2024.

Colorado is the first state in the country to mandate testing milk samples for bird flu at all commercial dairy farms in order to try and slow the spread.

State News

Colorado, bird flu epicenter, mandates weekly testing for H5N1 at dairy farms

Óscar Contreras 7:55 PM, Jul 23, 2024

Colorado is leading the nation in both the number of bird flu outbreaks among dairy cattle as well as the number of infected workers , effectively becoming the current epicenter of the outbreak after the largest cluster of human cases in the country to date was detected at a Weld County egg-laying operation earlier this month .

In Colorado, between 10% to 30% of cows in herds with reported outbreaks show clinical symptoms, according to Dr. Maggie Baldwin, state veterinarian and director of the Animal Health Division for the Colorado Department of Agriculture.

“We haven't seen a lot of differing clinical signs from what our original syndrome was in these cows," Baldwin said. “Some cows go off milk production entirely... Some of the cows are just generally sick."

Spillover events from the H5N1 strain that has been spreading among dairy cattle have been reported at two commercial poultry facilities in Weld County and the CDA is investigating a potential third spillover event from a dairy operation into a poultry farm.

“All of our dairy producers have been really great to work with. They’re working with the case managers. They’re completing our basic epidemiology questionnaire, but we're not getting that exact transmission route," Baldwin said. "What trucks might be going from farm to farm? What people? What equipment might be going from farm to farm? To identify that mechanism of transmission for farm-to-farm spread, not only between the dairies but also for the two spillover events and possibly third spillover event that we had into the poultry facilities.”

Óscar Contreras

More than 3.2 million egg-laying chickens have been culled in Colorado during July alone.

“My reaction is that that is a very big number and it is going to affect not only the chicken prices but also the egg prices," said Kishore Kulkarni, a professor of economics at Metropolitan State University of Denver. "In economics, we have a special law that when the prices have to go up, they go up very fast. When they have to go down, they go down very slow.”

Kulkarni said if the spread of avian flu continues, he expects an increase in the cost of eggs.

“I think if this does get worse, the whole supply chain gets disturbed by all this and that's why the prices will go up," said Kulkarni. "There are quite a few states that do not have bird flu as of yet. So you can borrow the eggs from them for a while and probably stabilize the prices in that fashion.”

Kulkarni added there's always the chance expectations about a future problem cause an increase in price even if the actual problem does not warrant it.

"Therefore the important word here is expectations," Kulkarni explained. "Are we expecting things to get worse? If we do, prices will go up very fast, very quickly, with a very large number. And if we obviously have stabilized expectations that this will just be a short-term storm, then we won't do anything about it and then it won't be as bad.”

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