Dive Brief:

• Bird flu has come to roost at major food producers, creating manufacturing complications that could threaten consumer prices.
• Egg producer Cal-Maine Foods said Tuesday it halted production at one of its facilities in Kansas due to the detection of the bird flu. The outbreak affected approximately 684,000 laying hens, or about 1.6% of its total flock.
• St. Louis-based CPG Post Holdings, meanwhile, said last week its flocks tested positive for the virus at third-party facilities in Iowa and Ohio used for food service products provider Michael Foods. Approximately 4.2 million egg-laying hens were affected, or roughly 10% of Post’s controlled supply of owned and contracted birds.

Dive Insight:

Cases of highly pathogenic avian influenza, or bird flu, have started to resurface following the worst outbreak on record in the U.S. last year.

Throughout 2022, the virus spread across the country by migratory waterfowl as well as infected backyard and commercial flocks of poultry, constricting supplies and inflating prices, especially for eggs.

After a dormant period this year, bird flu activity ramped up again as the months grew colder. Approximately 13.8 million birds from commercial and backyard flocks were infected by the disease or depopulated since October 2023, according to data from the U.S. Department of Agriculture. No domestic cases were reported in September.

Cal-Maine, the largest producer and distributor of fresh shell eggs in the United States, said it is working to increase production at other facilities to minimize disruption to customers. The company has not experienced positive tests at any other facilities, and doesn't plan to provide non-material updates on bird flu spread until its next quarterly report in January.

At cereal and CPG giant Post Holdings, its two recent incidents occurred at facilities in Iowa and Ohio, some of the states hit the hardest by the virus. Post has acquired a number of egg producers and brands over the years, including National Pasteurized Eggs, Almark Foods and Conagra's Egg Beaters brand.

The company said it does not expect to alert the public every time avian influenza is detected at one of its facilities, but assured investors of an update if the virus continues to spread and affect an additional 5% of its controlled supply.

The bird flu resurgence has farmers, companies and consumers on edge after what happened to eggs last year.

By December 2022, more than 43 million egg-laying hens were lost to the disease or to depopulation since the outbreak began in February, according to USDA. Wholesale egg prices started the year around $1 per dozen. As inventories declined they peaked above $5 per dozen during the period.

For now, an unexpected nosedive in consumer demand for eggs has kept prices low. Wholesale prices for cartoned eggs moved lower the week of Dec. 8, with the USDA noting consumer demand in the immediate, post-Thanksgiving marketing period declined more sharply than either of the two most recent years.

Sarah Zimmerman contributed to this story.