Unscrambling U.S. egg supply chains amid COVID-19.

Area of Science:

• Agricultural Economics
• Food Supply Chains
• Behavioral Economics

Background:

• The COVID-19 pandemic caused a significant shift in consumer behavior, moving from food-away-from-home to food-at-home consumption.
• This shift created unprecedented disruptions in the U.S. egg industry, impacting various market segments.

Purpose of the Study:

• To analyze the impact of the pandemic-induced consumption shift on the U.S. egg industry.
• To investigate the effects of regulatory changes on egg prices and market dynamics.
• To assess the changes in consumer demand for credence attributes in eggs.

Main Methods:

• Econometric analysis of retail and farm-gate egg prices.
• Examination of price differentials between table eggs and breaking stock eggs.
• Analysis of price premiums for credence attributes (cage-free, vegetarian-fed, organic).

Main Results:

• Retail and farm-gate prices for table eggs surged by 141% and 182%, respectively, while breaking stock egg prices dropped by 67%.
• FDA's temporary exemptions for breaking stock eggs facilitated a rapid return to pre-pandemic price dynamics.
• Premiums for credence attributes decreased by up to 34% and did not fully recover, suggesting a potential decline in consumer willingness-to-pay for these attributes.

Conclusions:

• The pandemic and subsequent regulatory adjustments significantly impacted U.S. egg market prices and dynamics.
• The reduced demand for credence attributes may indicate a consumer prioritization of basic needs over animal welfare and sustainability during economic uncertainty.
• No evidence of pandemic-related price gouging was found in the table egg marketing margins.