Trouble at the henhouse: Why the California egg shortage spells trouble for Canadian grocery prices

Last Saturday, Kalliope Bell posted a picture of her California state lottery ticket on social media. Well, we didn't win again tonight," she wrote. So that means no more eggs."

In Southern California, where Bell lives, she says she sees a dozen eggs priced anywhere from $5 to $10 - but grocery stores are usually sold out of the cheapest options, forcing her to pay triple what she's used to.

Canada has been largely insulated from The Great Egg Shortage of 2022-2023, which has gripped the U.K., U.S., and in particular California for weeks, resulting in bare shelves and astronomical prices. While Canadian egg prices have spiked too, consumers here probably won't experience shortages because of how our egg supply is managed, experts say.

But the underlying drivers of this strange crisis are signs of trouble ahead at the grocery store. An unprecedented outbreak of avian influenza has killed more than seven million birds at egg farms, poultry farms and backyard flocks in Canada, and almost 58 million in the U.S., along with countless wild birds. Scientists fear that climate change is making devastating outbreaks like this one more likely, though they say more research is needed.

Global warming has left clearer fingerprints on other food shocks. In November, romaine and other lettuces briefly vanished from Ontario grocery stores in large part due to California's mega-drought. The price of beef jumped last year because droughts forced ranchers to buy feed instead of letting cattle graze freely.

As other sources of inflation begin to ease, experts say that stress related to climate change will continue to exert upward pressure on food prices - and consumers shouldn't be surprised to see more gaps on grocery store shelves.

What we're seeing with more intense, more extreme and more prevalent climate impacts is definitely driving the pressure," says Allyson Fradella, an economist at Statistics Canada who works on the Consumer Price Index.If we can't produce food, it doesn't matter if there's a supply chain blockage, it doesn't matter if there's labour force pressures."

In North America, the trouble at the henhouse started in December 2021, when birds on an exhibition farm 10 minutes outside St. John's started dying in large numbers. The Canadian Food Inspection Agency confirmed the presence of H5N1, a highly pathogenic" strain of avian influenza, meaning it's both extremely contagious and extremely lethal.

Soon after, federal officials said they had detected H5N1 in gulls from the area. By spring, the virus was ripping through poultry and egg farms, backyard flocks, and - unusually - wild bird populations. The strain has a 90 to 100 per cent mortality rate in chickens.

Unfortunately I have to say that this has been unprecedented. We've never seen anything like this before, anything as vast and massive as we've seen over the last year-ish," says Shayan Sharif, a professor and acting dean of the University of Guelph's Ontario Veterinary College who specializes in avian influenza viruses.

Avian flu usually circulates in wild bird populations in the form of low pathogenic" strains, occasionally spilling over from these hosts into domesticated poultry. Most outbreaks are isolated, but when the virus mutates to become highly pathogenic it can cause major damage. In 2004, British Columbia's Fraser Valley poultry industry was devastated when a highly pathogenic strain led to the deaths of 19 million birds across multiple farms. A 2015 U.S. outbreak killed 50 million birds and caused $3.3 billion (U.S.) in economic losses.

The virus is also under close scrutiny because of its risks for human health. Before COVID-19, avian flu was seen as a prime suspect for triggering the world's next pandemic. Human cases of avian flu are rare and have been reported in people with prolonged exposure to infected birds; there has never been evidence of sustained human-to-human transmission. The U.S. Centers for Disease Control says that right now, the H5N1 bird flu situation remains primarily an animal health issue. However, CDC is watching this situation closely."

The current avian flu outbreak is unprecedented both because of its breadth - it has criss-crossed the country at least twice, Sharif says - and because it is causing mass mortality events in wild birds. Biologists in Peru have reported 13,000 seabird deaths including beaches littered with thousands of dead pelicans. At least 50 bald eagles have died in Canada, according to a federal database.

Sharif says the death toll for domesticated birds in Canada would have been much higher if government and industry had not implemented the lessons learned from the 2004 B.C. outbreak. But in the U.S., this outbreak has become the worst in the country's history.

Scientists are investigating the role of climate change in avian flu outbreaks. Migratory wild birds like ducks and geese are implicated in the spread of the virus, and global warming is scrambling the migration patterns of these species. Interactions among birds that usually don't meet create new opportunities for the virus to spill over into species that have never seen it before, who then carry it to unexpected places.

Things have changed," says Sharif. We are seeing birds that would have flown to warmer climates sticking around in colder climates. Sometimes breeding grounds for birds have changed. Sometimes bird species are encroaching on other birds' territory."

Sharif stresses that it's impossible to know if climate change played a role in the emergence of this outbreak. Other researchers have said that more research is needed to understand the interplay between global warming and avian flu.

But, Sharif says, you can ask the question, have you seen this virus or this sort of virus before? If you haven't, what has changed over the last several decades?"

I'm not saying I think that climate change is the only culprit here. But I think it's quite logical to point a finger."

As the avian flu raged over the past year, egg prices have inflated by 16.5 per cent, according to StatCan's Consumer Price Index. Some provinces have been hit worse: Alberta has seen a 21.4 per cent rise. Poultry prices have also risen by more than 10 per cent.

Fradella, the economist, says avian flu is absolutely" driving up prices. The outbreak is setting records," she says, citing the approximately 65 million birds killed continent-wide. When you have that number of poultry removed from the food chain, there's going to be price impacts, there's going to be price shocks."

As most Canadians know from the news or their credit card statements, food inflation has been even worse than the already painful general core" inflation rates. In December, while the annual rate of inflation was 6.3 per cent, falling for the fourth time in five months, food inflation remained higher than that headline" number for the 13th straight month, at 11 per cent.

Food inflation has many causes, says Fradella. Supply chain blockages and the war in Ukraine have played a role.

But I would say that weather systems are arguably the most important factor for food," she says. When this erratic weather is happening and there's nothing being produced or poor harvests, that's where we're seeing price increases."

Food price increases have a tendency to become entrenched, she adds. One reason is that a farmer who experiences major crop losses one year might decide to plant less of that crop the next year, contributing to scarcity for that product.

Sylvain Charlebois, head of the AgriFood Analytics Lab at Dalhousie University, says that the volatility we've seen at the grocery store over the last year is the new normal."

I think we need to accept the fact that things are going to get more complicated when it comes to risk management related to climate change," he says.

He says produce and animal proteins - the perimeter of the grocery store, where nutrition experts often encourage consumers to shop more because these sections contain healthier foods - are particularly at risk.

Fresh is good, but fresh is vulnerable."

Kate Allen is a Toronto-based reporter covering climate change for the Star. Follow her on Twitter: @katecallen