I don’t even want to think about it—a new virus is gaining traction in the US. So far, this one has mostly been limited to birds and animals, but there are concerns the bird flu could become a greater threat to humans.

The flu is wreaking havoc on egg farmers, who have lost nearly ten percent of US commercial egg-laying hens this year alone, either directly from the flu or the need to cull infected stock.   

Americans are seeing the impact of bird flu at the grocery store, where eggs are either unavailable or absurdly expensive. As of January, they were averaging $4.95 per dozen nationwide, though it’s not uncommon to pay closer to $10 in certain markets. And it’s only going to get worse. The USDA expects egg prices to rise 41% this year.

It’s so serious that in this era of government cost-cutting and DOGE, the USDA plans to spend $1 billion to support the egg industry. Soon we’ll be importing eggs from nations like Turkey. 

Not everything is a loss when it comes to eggs. Shares of Cal-Maine Foods, Inc. (CALM) the nation’s largest egg producer, are up 58.68% over the past year, outperforming the SPDR S&P 500 ETF Trust (SPY), and six of the Mag Seven stocks.

Are we potentially looking at another pandemic? One influenza virologist at Emory University recently told Nature that, “The risk has increased as we’ve gone on — especially in the last couple of months.”

We learned a lot from Covid-19. I suspect the response to a new pandemic would look different. Even so, it is hard to even think about the risk. I hope it doesn’t come to that, and I’d be happy if the government spent many billions to ensure it doesn’t.

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Few people in finance know more about this topic than my latest guest on Global Macro Update, Cumberland Advisors co-founder David Kotok.

In his new book, The Fed and the Flu: Parsing Pandemic Economic Shocks, David analyzed over 300 epidemics, beginning in antiquity, through the Black Death, which wiped out an estimated 30%-50% of Europe’s population, and on to the present day.

Here’s David on what he found:

In every single case, a pandemic, epidemic, plague kills people, not capital. So, the capital stock remains intact. Poor people inherit very little from poor people who died. Wealthy people inherit from wealthy people who died and get richer. What happens to the whole? Wealth per capita goes up.

Second effect, the pandemic triggers innovation and it forces it. We're seeing it right now electronically with AI, but we saw it throughout history and the nature of the innovation is to force the more productive enterprise to replace the least productive.

Pandemics are not as infrequent as you may think, and they share many common traits. One trait they unfortunately do not share, universally, is preparedness.

Thankfully, David is not too worried about the bird flu. I hope you’ll take some time to hear his thoughts on the lessons to be learned from past pandemics.

Watch my interview with David Kotok now by clicking the image above. A full transcript of our conversation is available here.

You can learn more about The Fed and the Flu here.

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Thanks for reading and watching.

Ed D’Agostino
Publisher & COO

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