More than 49m chickens and turkeys died or were euthanized in 15 states as flu virus spread to midwest farms

This article is more than 5 years old

This article is more than 5 years old

Eggs are becoming much more expensive in the US – by the dozen and otherwise.

The outbreak of avian flu caused the cost of eggs to nearly double in June for producers. Wholesale prices for chicken eggs jumped 84.5% in June, the US Department of Labor said.

The spike comes amid otherwise tame inflation across the rest of the economy. The producer price index, which measures the costs of goods and services before they reach consumers, rose 0.4% in June.

Midwest bird flu outbreak raises egg and poultry prices Read more

Over the past 12 months, producer prices have fallen 0.7% because of lower oil and gas costs. Wholesale gas prices rose 4.3% last month but are down 30.3% from a year ago, keeping inflation firmly in check.

A surprising amount of the increase in producer prices in June came from eggs, which make up an extremely small share of the broader index but have soared in price since April.

“When they’re rising at a 58,000% annualized rate, as they have the past two months, the impact is material,” said Ted Wieseman, an analyst at Morgan Stanley who estimates that eggs account for nearly a fifth of the total 0.4% increase in producer prices last month.

Wholesale chicken egg prices recorded the largest increase since the government began tracking the costs in 1937. More than 49m chickens and turkeys died or were euthanized in 15 states this spring as the flu virus spread from the Pacific north-west into midwest farms.

The loss of those birds has cut into the supply of eggs, provoking a shortage that should begin to cause higher egg prices in stores, Wieseman said.

Still, the producer price index showed that overall inflation remains mild. Core prices, which exclude energy and food, rose 0.3% in June.

Relatively cheap oil has limited inflation across much of the US economy. The cost of Brent crude oil in the markets barely budged for much of June, after climbing at the start of May to nearly $68 a barrel.

Gasoline prices have stayed relatively flat in July, dropping to a national average of $2.78 a gallon from $2.80 a month ago, according to AAA. Average retail gas prices have fallen nearly 23% over the past 12 months.