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

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  • Malone, Trey
  • Schaefer, K. Aleks
  • Lusk, Jayson L.

Abstract

This article investigates how the shift from food-away-from-home and towards food-at-home at the onset of the COVID-19 pandemic affected the U.S. egg industry. We find that the pandemic increased retail and farm-gate prices for table eggs by approximately 141% and 182%, respectively. In contrast, prices for breaking stock eggs—which are primarily used in foodservice and restaurants—fell by 67%. On April 3, 2020, the FDA responded by issuing temporary exemptions from certain food safety standards for breaking stock egg producers seeking to sell into the retail table egg market. We find that this regulatory change rapidly pushed retail, farm-gate, and breaking stock prices towards their long-run pre-pandemic equilibrium dynamics. The pandemic reduced premiums for credence attributes, including cage-free, vegetarian-fed, and organic eggs, by as much as 34%. These premiums did not fully recover following the return to more “normal” price dynamics, possibly signaling that willingness-to-pay for animal welfare and environmental sustainability have fallen as consumers seek to meet basic needs during the pandemic. Finally, in spite of widespread claims of price gouging, we do not find that the pandemic (or the subsequent FDA regulatory changes) had a meaningful impact on the marketing margin for table eggs sold at grocery stores.

Suggested Citation

  • Malone, Trey & Schaefer, K. Aleks & Lusk, Jayson L., 2021. "Unscrambling U.S. egg supply chains amid COVID-19," Food Policy, Elsevier, vol. 101(C).
  • Handle: RePEc:eee:jfpoli:v:101:y:2021:i:c:s0306919221000245
    DOI: 10.1016/j.foodpol.2021.102046
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    Cited by:

    1. Gao, Yixuan & Malone, Trey & Schaefer, K. Aleks & Myers, Robert J., 2023. "Disentangling Short-Run COVID-19 Price Impact Pathways in the US Corn Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    2. Paul Lehmann & Silke Beck & Mariana Madruga de Brito & Erik Gawel & Matthias Groß & Annegret Haase & Robert Lepenies & Danny Otto & Johannes Schiller & Sebastian Strunz & Daniela Thrän, 2021. "Environmental Sustainability Post-COVID-19: Scrutinizing Popular Hypotheses from a Social Science Perspective," Sustainability, MDPI, vol. 13(16), pages 1-21, August.

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    More about this item

    Keywords

    COVID-19; Supply chain; Food safety regulation; Eggs; Price transmission;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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