URBANDALE, Iowa – As the nation’s top egg producer, Iowa’s egg industry has felt the impact of the nation’s restaurant shutdowns last year due to COVID-19 – the repercussions may be long-lasting and recovery slow going, according to industry experts.

“Initially, the biggest impact was a lack of market in schools and the foodservice sector, which led to the need to reduce Iowa flock sizes by an average of nearly 20 percent,” said Kevin Stiles, executive director of the Iowa Egg Council, and the Iowa Poultry Association, in Urbandale.

Stiles said some producers – with the foodservice slowdown impacting a greater amount of their customers – were impacted more than others.

“Moving into the summer and early fall, we did see a small rebound in the foodservice market and many schools open across the country, but unfortunately never enough to bring huge benefits to Iowa egg farmers,” he said.

“Late in the year, as the weather grew colder and people in many areas of the country were unable to dine outside, and with many schools still operating in a virtual environment, we saw demand stagnate, and in some cases, slow again,” he added.

Maro Ibarburu, associate scientist and business analyst at Iowa State University’s Egg Industry Center, said 2020 affected the egg industry’s two sectors – shell eggs and egg products – very differently.

“The decrease in restaurant and hotel activity resulted in a sharp decrease of the demand for egg products, while the grocery store demand for shell eggs was increased by consumers staying at home and cooking more,” he said.

“The shell egg price corrected itself quickly back to normal levels, while it took more time for the liquid egg price to reach values close to the 10-year average before the pandemic,” he added. “The market finally got there in October and November, but with a lot of volatility. At that time, the foodservice activity dropped again, and so did the liquid egg prices.”

For the most part, Stiles said, the shell egg market held strong as consumers ate more at home, baking and cooking comfort foods.

“Eggs were viewed as both an economical and nutritious food for families when meals were being prepared at home,” he said.

“Liquid egg markets did return somewhat for foodservice, but only marginally in June, July and August,” he added. “There were regional differences in foodservice patterns and volumes, which were sometimes challenging to forecast.”

Ibarburu said, however, the January 2021 price for liquid whole egg was 29 percent below the 10-year average January price. “The Midwest large white shell egg price in January was 10 percent below the 10-year average January price. (I always compare the same month because egg demand is very seasonal),” he said. “Egg market volatility makes the future hard to predict.”

According to the U.S. Census Bureau, he said grocery store sales in December 2020 (most current data) were 8 percent higher than December 2019, “which is a lot lower than the 31-percent difference experienced in March 2020 with respect to March 2019.

“The U.S. Census Bureau also reported the Foodservice and Drinking Places sales in December 2020 were 21 percent lower than December 2019, which is a lot higher than the negative 52 percent difference experienced in April 2020 with respect to April 2019,” he said.

He said Iowa egg farmers were disproportionally affected by the changes in egg markets because more than two-thirds of the eggs produced in Iowa are broken for further processing, or the liquid egg market.

He added the Iowa layer flock was reduced from 55 million hens in February 2020 to 45 million hens in July 2020 as a result of the lower demand, and it only recuperated to 46 million last December.

As far as the markets for shelled and liquid eggs rebounding, Ibarburu said, “The price volatility makes it difficult to say if the markets are really coming back to normal, but they are closer to normal than during the pandemic.

“The liquid egg production this January was 14 percent lower than January 2020, and the price was lower than that last year, which is evidence of a lower demand for liquid egg,” he said.

“The total egg consumption during the last quarter of 2020 was overall 2 percent below the last quarter of 2019, which is a combination of a 1 percent higher shell egg consumption and a 9 percent lower egg products consumption,” he added. “So, while we seem to be gaining ground, we aren’t back to what I would call normal yet.”

Stiles said egg farmers producing for the liquid and frozen egg markets received Coronavirus Food Assistance Program (CFAP) funding in Round 1, and most egg producers were eligible for CFAP 2 funding.

“This funding did offer some relief for Iowa egg producers and was most welcomed,” he said. “Most recently, funding was extended to include both pullet and contract growers, which was desperately needed for these farmers, and much appreciated.”

Ibarburu said the Iowa Department of Agriculture and Land Stewardship helped the affected Iowa egg farmers who euthanized and properly disposed of laying hens from April 1 and July 20, 2020. “Each approved applicant was eligible to receive 25 cents per layer for up to 1 million hens to help offset the cost of depopulation and disposal,” he said.

Stiles said egg producers remain concerned with the continuing low egg prices and volatile markets.

“Rising feed costs and other inputs will challenge our industry for the coming months,” he said. “A return to normalcy and eventual rebound in restaurant sales is needed, and could arrive too late for some.

“Farmers are optimists and are hoping that by mid- to late-2021 – and we approach a herd immunity from a vaccination standpoint – that people will return to eating out, and schools will operate at normal volumes. There is some hope we will see greater foodservice sales, but it is unlikely sales will return to pre-pandemic levels until sometime in 2022.”

Ibarburu said, “The future really depends on the demand behavior.”