We’re Keeping an Eye on Rising Egg Costs

Running a food service operation involves managing hundreds of moving parts. You need to pay attention to the quality, variety and healthfulness of food. And you need to make sure it’s there when people need it. Some things are in your control, but many are not.

Which brings us to the current avian flu problem.

Farmers began reporting flu in turkeys and hens last December, and it has only gotten worse in recent months. The U.S. government estimates the current epidemic will result in about 340 million dozen fewer eggs being produced this year.

Even for people who have worked in the food service industry for years, it’s been an eye-opener to be reminded of how many kinds of foods contain eggs, and have thus been affected by the resulting increase in wholesale egg prices.

“It’s incredible the amount of products that contain eggs. There are more than anyone realized,” says Phil Tollett, our purchasing manager. The list includes chocolate candy bars, pastries and even the coating on potato chips. Also, anything mayonaise-based, like pasta salad and potato salad. Worst of all, the problems aren’t short-term. “This is going to have a ripple effect for probably two years,” Phil says.

Depending on how far south the epidemic travels, it’s estimated that as much as half of the chicken population of North America will eventually have to be destroyed.

A 30-year veteran of the industry, Phil says the only thing of similar scale he can recall is a peanut recall about four years ago. “That had a drastic impact on the market, because not only are peanuts in a lot of products, but it’s also used as an additive to many other products, and still more products contain peanut oil.” Even after four years, he says, “there are peanut-based products I cannot put back into the vending machine.”

This more recent event will raise food costs, of course, perhaps as much as 5-7 percent overall for us. For now, we’re happy to report that we have not had to pass along any of those higher costs to our customers. But that won’t last. After the U.S. Department of Agriculture delivers a more definitive picture of the egg situation, possibly around September 1st, we’ll have a better idea of the total cost impact, and we can begin sharing some of those increased costs with our clients. In the meantime, please don’t hesitate to contact us if you have any questions.