The other flu (CALM)
Egg prices have hit record highs driven by the worst outbreak of bird flu that has killed nearly 60 million chickens and turkeys. The flu has been spread by migrating birds infecting farmers’ flocks. Avian flu is highly contagious and extremely lethal. The CDC estimates 90-100% of chickens die, often within two days. Once an infection is confirmed at a farm entire flocks are destroyed to try to contain the spread. More than two-thirds of the birds destroyed are egg laying chickens, representing about 5% of the U.S. chicken population. Recently wholesale prices of Midwest large eggs hit $5.36 per dozen according to Urner Barry. Retail egg prices have increased more than any other item in the grocery store, up 30% so far this year.
Egg consumption per capita has been growing for the past decade until COVID-19 and the pandemic impacted supplies. Eggs are used in a variety of products and recipes. Kraft Heinz mentioned egg inflation in September. Egg-laying hens are down 4% and the avian flu continues to cull flocks limiting the supply response so prices must increase until there is a demand response. Since eggs are an inexpensive food and a source of protein, the price response has to be sizable. Plant-based egg sales are still small at $39M in 2021 according to SPINS data.
Beer shipments fall (BUD)
Domestic brewers shipped 4% fewer barrels of beer in November compared to the prior year according to the Alcohol and Tobacco Tax and Trade Bureau. YTD shipments have decreased by 4.1% YOY. The only months that have seen shipment growth this year have been March (+1.5%) and August (+2.4%). The accelerating price increases in recent months are pressuring volumes.
Miles driven (WMT)
Travel on all roads and streets increased 0.1% YOY in October according to the Federal Highway Administration. Cumulative travel for 2022 was up 1.5% YOY. The strongest growth was seen in the West at up 1% while the Northeast was the weakest at down 1%. While miles driven have recovered, shopping behavior and commuting to the office have not. Weekly grocery shopping trips have returned to 2019’s 1.6 visits per household, but mass retailers and club stores have gained at the expense of supermarkets.
