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In China, March '25 egg futures haven't budged. They were 3200 CNY/1000kg (for 5000kg contracts) in August and 3200 last week. Why is bird flu hitting us harder

In China, March '25 egg futures haven't budged. They were 3200 CNY/1000kg (for 5000kg contracts) in August and 3200 last week. Why is bird flu hitting us harder?

elmerfud 2y ago
Because we want it to hit us harder. We can call it extra precautions or maybe China cares less, put it under whatever label you want. It is incredibly low risk for the avian flu to be transferred through eggs to humans. Also the avian flu is impact on humans once you get it is generally very low risk as well. There are always exceptions to both of these and people panic over the exceptions rather than accepting some amount of risk. We also seem to have given up on the idea of people making individual choices about risk profiles and instead default everyone into the category of "the government is here to save you". China, doesn't have this same outlook.
- nico 2y ago
  So who is raising the prices? And why? Is the govt telling the egg companies to kill their chickens, or do something in particular that makes it harder for them to produce eggs? Or is it grocery stores preemptively raising prices assuming egg supply is going to be short soon?
  - legitster 2y ago
    > Is the govt telling the egg companies to kill their chickens, or do something in particular that makes it harder for them to produce eggs? Yes! That's literally the entire cause of the egg shortage. Over 100 million birds have been slaughtered in the US so far to curtail the outbreak.
    - jeffbee 2y ago
      OK but 20 million of those died of the disease itself. What's your counterfactual for how many would have died without the culling? You seem to be implying that it would be fewer, but that's not obviously correct.
      - legitster 2y ago
        I don't understand your point anymore. Egg prices are up because we lost somewhere between 1/5 and 1/4 of our egg laying birds in the last year, and it takes a while to breed that many replacement birds. I have no idea what argument you are trying to make about the avian flu.
        jeffbee 2y ago
        I'm trying to figure out why the excursion in our market prices is so much greater than that in China when, as you mention in another comment, this disease has hit other countries as well.
        legitster 2y ago
        The USDA orders much more expansive precautionary slaughtering programs than in other countries. Each country also subsidizes their agriculture in different ways so they tend to respond to price shocks differently.
- jeffbee 2y ago
  The disease itself has killed tens of millions of hens and farmers are slaughtering their flocks to stop it from spreading. I don't see your point about risk appetite under these circumstances.
  - elmerfud 2y ago
    The disease is harmful to the birds but is of relatively low risk to almost no risk to humans. Especially with a properly cooked egg. That's the risk category I'm talking about. Because the amount of birds that died to the disease is insignificant to the amount ordered killed by the government to try and control the spread.
nico 2y ago
It seems like a US-only problem right now. Is it really about the bird flu?
- Arnt 2y ago
  Suppose twenty million hens die of a disease, and you order another eighty million slaughtered. That's going to lead to fewer eggs being laid, obviously, and a nonzero price increase. Now there are two questions, ① how many more eggs were laid than needed before this happened and ② if you want to look at the reason for the increase, how much of the increase is due to those 20 and how much is due to those other 80? The gentle reader has ample scope to let the answers be influenced by political goals.
legitster 2y ago
H5N1 went raged through China last spring and it has since spread the the US. If you look at their futures market between June and December prices were crazy during that period.
- jeffbee 2y ago
  Egg futures? At the extremes, according to the data I am looking at, prices rose less than 10% and were below historical norms throughout.

In China, March '25 egg futures haven't budged. They were 3200 CNY/1000kg (for 5000kg contracts) in August and 3200 last week. Why is bird flu hitting us harder?

elmerfud 2y ago

Because we want it to hit us harder. We can call it extra precautions or maybe China cares less, put it under whatever label you want. It is incredibly low risk for the avian flu to be transferred through eggs to humans. Also the avian flu is impact on humans once you get it is generally very low risk as well. There are always exceptions to both of these and people panic over the exceptions rather than accepting some amount of risk. We also seem to have given up on the idea of people making individual choices about risk profiles and instead default everyone into the category of "the government is here to save you". China, doesn't have this same outlook.

nico 2y ago
So who is raising the prices? And why? Is the govt telling the egg companies to kill their chickens, or do something in particular that makes it harder for them to produce eggs? Or is it grocery stores preemptively raising prices assuming egg supply is going to be short soon?
- legitster 2y ago
  > Is the govt telling the egg companies to kill their chickens, or do something in particular that makes it harder for them to produce eggs? Yes! That's literally the entire cause of the egg shortage. Over 100 million birds have been slaughtered in the US so far to curtail the outbreak.
  - jeffbee 2y ago
    OK but 20 million of those died of the disease itself. What's your counterfactual for how many would have died without the culling? You seem to be implying that it would be fewer, but that's not obviously correct.
    - legitster 2y ago
      I don't understand your point anymore. Egg prices are up because we lost somewhere between 1/5 and 1/4 of our egg laying birds in the last year, and it takes a while to breed that many replacement birds. I have no idea what argument you are trying to make about the avian flu.
      - jeffbee 2y ago
        I'm trying to figure out why the excursion in our market prices is so much greater than that in China when, as you mention in another comment, this disease has hit other countries as well.
        legitster 2y ago
        The USDA orders much more expansive precautionary slaughtering programs than in other countries. Each country also subsidizes their agriculture in different ways so they tend to respond to price shocks differently.
jeffbee 2y ago
The disease itself has killed tens of millions of hens and farmers are slaughtering their flocks to stop it from spreading. I don't see your point about risk appetite under these circumstances.
- elmerfud 2y ago
  The disease is harmful to the birds but is of relatively low risk to almost no risk to humans. Especially with a properly cooked egg. That's the risk category I'm talking about. Because the amount of birds that died to the disease is insignificant to the amount ordered killed by the government to try and control the spread.

nico 2y ago

It seems like a US-only problem right now. Is it really about the bird flu?

Arnt 2y ago
Suppose twenty million hens die of a disease, and you order another eighty million slaughtered. That's going to lead to fewer eggs being laid, obviously, and a nonzero price increase. Now there are two questions, ① how many more eggs were laid than needed before this happened and ② if you want to look at the reason for the increase, how much of the increase is due to those 20 and how much is due to those other 80? The gentle reader has ample scope to let the answers be influenced by political goals.

legitster 2y ago

H5N1 went raged through China last spring and it has since spread the the US. If you look at their futures market between June and December prices were crazy during that period.

jeffbee 2y ago
Egg futures? At the extremes, according to the data I am looking at, prices rose less than 10% and were below historical norms throughout.