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

Trey Malone (), K Aleks Schaefer () and Jayson Lusk ()

Food Policy, 2021, vol. 101, issue C

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.

Keywords: COVID-19; Supply chain; Food safety regulation; Eggs; Price transmission (search for similar items in EconPapers)
JEL-codes: L51 Q13 Q18 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:101:y:2021:i:c:s0306919221000245

DOI: 10.1016/j.foodpol.2021.102046

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