“I think the bird flu is here to stay and the assumption that egg prices will go back down to pre-pandemic levels is a bad one,” said Andrew deCoriolis, executive director of the farm animal welfare nonprofit Farm Forward. “It may be that the egg market remains extremely volatile and expensive.” 

Food companies that rely significantly on poultry products should take immediate steps to pandemic-proof their supply chains. 

Avian flu isn’t a new threat — the first references date back to 1878. A few decades later, the “Spanish flu” pandemic was one of the deadliest to humans in history — and it originated from an avian virus. It killed 50 million to 100 million people worldwide (compare that to the estimated 6.8 million COVID-19 deaths). The now-dominant H5N1 avian flu strain has been regularly affecting farms since the 1950s without crossing over to humans, but that might be about to change. 

Over the past year, the avian flu ravaged the bird world with a highly contagious and deadly strain that devastated poultry farms and wild birds. In the U.S. alone, it has killed almost 60 million chickens and other domesticated birds since the beginning of 2022. Deaths of wild birds are much harder to track but are estimated to amount to at least 50,000 globally. 

The virus has also spread to humans and other mammals. A recent evaluation of an outbreak on a Spanish mink farm shows evidence of mammal-to-mammal transmission. This significant threshold makes a deathly spread among humans — that we are woefully unprepared for — much likelier. 

Hopefully, avian flu won’t turn into another human pandemic — we’re still working through the effects of COVID-19. But even if it remains mostly within bird populations, it’s a significant business risk for food companies that they don’t seem prepared for. I reached out to more than 10 companies and industry associations to get insights into their avian flu response strategies and couldn’t convince anyone to talk to me about it. That’s a big red flag in my books. 

While the current situation is filled with suffering for birds and farmers, it presents an unseized opportunity for sustainability teams to revamp their long-term strategy for poultry use. Sustainability teams should strike when the economics favor implementing new practices that manage risk and build a resilient and less volatile food system. They can leverage the opportunity by implementing three practices: lowering dependencies; procuring more sustainably; and advocating for a level playing field. 

Step 1: Procure more sustainably

The easiest thing you can do to pandemic-proof your egg supply chain is to switch to more sustainable suppliers. While a significant price jump between conventional and specialty eggs — such as cage-free, organic and pasture-raised — might have prohibited your company from making that shift in the past, it’s now more doable as the price gap has narrowed or even disappeared. According to the U.S. Department of Agriculture (USDA), cage-free eggs were half the price of conventional ones at the end of January. 

Switching to more sustainable suppliers — especially free-range systems — will likely reduce price volatility in the long term, since their farms are less prone to disease outbreaks by design. Leah Garcés, president of Mercy for Animals and poultry expert, explained the several important characteristics of pasture-raised farms that make them less susceptible to disease. 

According to her, in conventional chicken farms, hundreds of thousands of genetically identical hens with weak immune systems are stacked in cages on top of each other, suffering under very poor conditions. In contrast, pasture-raised flocks are more genetically diverse, less crowded and overall healthier. These conditions make the farms a less favorable breeding ground for viruses and reduce the likelihood of wiping out an entire flock if one does break out. They also tend to be smaller overall — so if a flock gets infected, it doesn’t impact the overall egg supply as severely. 

But there’s a tradeoff to sourcing free-range eggs. Since production is less efficient, it requires more resources per egg — feed, water, space, etc. That means we likely wouldn’t be able to entirely move today’s industrial egg production to more extensive, higher-welfare farms without causing other environmental damage. This scaling challenge brings us to the second step. 

Step 2: Lower your dependency on volatile ingredients

Beyond sustainable procurement systems for eggs, you should be working to lower your overall use of eggs and other poultry products. There are two ways to go about it — reformulating your products or recipes so they don’t rely on poultry-based ingredients anymore (or use less), or subbing in plant-based alternatives. 

DeCoriolis has observed several food service companies moving in that direction over the past few years. “Companies can start by removing eggs from dishes where it has no impact on the culinary experience at all — for example, a cookie, burrito or pancakes,” he told me. This approach removes an expensive and increasingly volatile ingredient from the recipe and makes the dish accessible to a broader clientele, such as customers with egg allergies. 

By November, the USDA had spent more than $113 million to kill and dispose of flocks and on virus elimination activities.

There’s also a growing array of plant-based egg alternatives with increasingly good taste and functionality from startups like Just Egg, Zero Egg and the Every Company. The San Francisco-based startup Just Egg has been the most vocal of them, reminding customers with new creative campaigns that “plants don’t get the flu.”

Matt Riley, chief revenue officer at Just Egg, told me the brand has grown by 17 percent over the past six months with repeat purchase rates of over 50 percent. While egg prices have risen by an average of 59.9 percent in the U.S. from December 2021 to December 2022, Just Egg said its prices remained stable over the past year. 

While retail remains its biggest channel, Riley saw food service and consumer packaged goods accounts grow faster in 2022, with ever-more companies launching new menu items and packaged products featuring plant-based eggs. Yet, they are all branded as novel plant-based options rather than subbing into existing items. Perhaps we’ll start to see a change in these defaults as the H5N1 virus continues to spread this year. 

Step 3: Create a level playing field 

While the first two steps are critical cost and risk management strategies food companies should use, they likely won’t be wide-ranging enough to get to the heart of the problem. The core issue is that the conventional egg industry, which provides the dangerous breeding grounds for the virus, has no financial incentive to change. 

With 60 million infected birds killed via gruesome methods (suffocating them or drowning them in foam) over the past year, one would think this has been an expensive crisis for the egg industry. In reality, the conventional producers reaped huge profits, taking advantage of rising prices and government bailouts. For example, Cal-Maine Foods, the country’s largest egg manufacturer, doubled its revenue in 2022 and increased gross profits tenfold year-over-year. The advocacy organization Farm Action is accusing it of price gouging and collusion. 

“The issue will be solved by the industry when companies will have to pay for the problems factory farming causes. They would find solutions pretty quickly if it weren’t for the easy access to taxpayer money to fix the problem every year,” said Garcés. 

She is referring to USDA’s Livestock Indemnity Program, through which affected farmers can recover 75 percent of the lost animals’ cost. By November, USDA had “committed more than $336 million to indemnity payments to commercial producers” and “spent more than $113 million to kill and dispose of flocks and on virus elimination activities,” according to reporting in Successful Farming.  

Food companies can play an important role in lobbying for such policies to change. Consumers shouldn’t have to pay for expensive eggs while also bailing out the livestock industry for a recurring and predictable problem it refuses to take care of. By putting their weight behind policy reforms for a more equitable food system, downstream food companies can create an equal playing field for everyone, helping sustainable alternatives compete. 

There’s never been such a thing as “cheap eggs,” and it’s time for the U.S. government to pack up its safety net, forcing producers to own up to the problems they cause. 

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• Source: https://www.greenbiz.com/article/3-foolproof-steps-flu-proof-your-egg-supply