The impact of the egg crisis on economy and logistics | Control Terrestre

The Impact of the Egg Crisis on Economy and Logistics

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We analyze how the egg crisis in the United States is affecting not only the global economy and logistics, but also Mexico, a key country in poultry trade with its northern neighbor. The spread of avian flu has caused a drastic increase in egg prices, highlighting the fragility of supply chains and the impact these crises can have on different markets. The Supply Chain Under Pressure Since the start of the avian flu outbreak in 2022, more than 100 million laying hens have been sacrificed, drastically reducing egg production. This has generated problems in supply logistics, affecting supermarkets and retail stores that have had to implement purchase restrictions. Establishments like Trader Joe's and Costco have limited the number of cartons per customer, while in some supermarkets shelves have been left empty. In the food industry, chains like Waffle House have added 50-cent surcharges per egg on their menus to compensate for elevated costs. This situation has forced restaurants and bakeries to adjust their prices or seek alternatives to not pass the entire increase to consumers. The crisis also affects fresh product transportation logistics, as the reduction in egg production has generated changes in distribution patterns. Refrigerated cargo transportation companies have had to modify routes and optimize delivery times to respond to shortages. Additionally, volatility in supply and demand has generated additional costs in storage and distribution of poultry products. Inflation and Market Volatility The increase in egg prices has been a key factor in rising inflation in the United States. According to the U.S. Bureau of Labor Statistics (BLS), the consumer price index (CPI) rose 0.5% in January 2025 compared to December 2024, with egg prices increasing 15.2% in just one month. This increase has contributed to the acceleration of general inflation and has directly impacted financial markets. Dow Jones futures fell more than 400 points after the publication of the inflation report, reflecting the uncertainty this crisis generates among investors. The Federal Reserve (Fed) has indicated it will closely monitor inflation before considering any interest rate cuts. Jerome Powell, Fed chairman, has emphasized that they will not make hasty decisions based on isolated inflation data, indicating that monetary policy could remain restrictive for longer. Impact on International Trade and Mexico The impact of the egg crisis is not limited to the United States. Countries like Mexico, the main exporter of poultry products to the U.S., have seen increased demand for eggs, which could generate pressure on domestic prices. This also affects cross-border logistics, where transportation companies have had to adjust their strategies to meet supply needs in both countries. Additionally, the increase in egg prices in the United States has led to greater imports from Mexico, which generates a reduction in domestic supply and possible price increases in the Mexican market. Logistics companies and transporters in Mexico must be prepared to handle these changes and optimize their operations to avoid local shortages. On the other hand, the imposition of tariffs by the Trump administration on steel and aluminum imports could further increase production and distribution costs for consumer goods, contributing to persistent inflation. Goldman Sachs economists have projected that without these tariffs, annual inflation could be reduced to 2.3% by the end of 2025; however, with the imposed tariffs, the figure could rise to 2.8%. When Will Prices Stabilize? While some experts believe egg costs could decrease in the coming months if the spread of avian flu is controlled, the shortage of laying hens will take time to resolve. Replenishing poultry stocks is a process that takes months, and uncertainty about disease evolution remains a risk factor for price stability. On the other hand, inflation remains a persistent problem. While egg costs continue at record levels, consumers and businesses face a complex economic panorama, where food prices and market volatility remain a central concern. Lessons for Global Logistics The egg crisis in the U.S. highlights the vulnerability of supply chains to unexpected health and economic events. For logistics companies, this situation underscores the importance of having risk mitigation strategies, supplier diversification, and distribution route optimization. Transportation and logistics companies must bet on digitalization and automation to improve efficiency in supply chain management. Technologies like artificial intelligence and data analysis can help predict demand fluctuations and optimize delivery times. In an increasingly interconnected world, crises in one sector can trigger domino effects in the global economy. Therefore, strategic planning and logistics resilience are key to facing future challenges and guaranteeing the supply of essential products in times of crisis. Control Terrestre remains attentive to these changes and is prepared to face the logistics challenges that arise from this crisis.

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