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Health craze whips up prices for egg whites

A run on egg whites in the U.S. food industry has made prices sizzle for the sticky ingredient, stirring up turbulence for companies from Cargill to an investment holding of Goldman Sachs.

Analysts say the fragile egg supply chain has been under pressure as fast-food restaurants race to add low-cholesterol egg sandwiches to menu boards. The cost of liquid egg whites has flipped above yolks for the first time in years, according to Urner Barry, a food price information service.

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In the latest sign of a squeeze, the U.S. Bureau of Labor Statistics last week reported wholesale prices for processed eggs had leapt 56 percent from a year ago. The average American eats more than 250 eggs annually, according to the US Department of Agriculture.

McDonald's introduced its Egg White Delight McMuffin to breakfast customers in April 2013. "Pretty much the rest of the industry followed suit," said Rick Brown, senior vice president at Urner Barry.

Hamburger chain Jack in the Box launched an egg-white breakfast sandwich in December, followed by 7-Eleven convenience stores. Dunkin' Donuts serves an egg-white flatbread.

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The price of unpasteurized liquid egg whites has soared 80 percent to more than $1 per pound in the past year, Urner Barry data show. Leading egg products manufacturer Michael Foods—owned by a private equity affiliate of Goldman Sachs—declared it a "record high" market.

"The elevated markets continued to be driven by the high demand for egg white products across the food service and retail channels," Mark Westphal, chief financial officer at Michael Foods, said in a March call with analysts. Post Holdings has since agreed to buy Michael Foods for $2.45 billion.

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Egg white sandwiches have less artery-clogging cholesterol and fewer calories than those made with whole eggs. McDonald's unveiled its new product as part of a company commitment to improve nutrition choices.

Cargill, the US-based agribusiness giant, has said it invented the Egg White Delight for McDonald's. "As consumers continually look for healthier options, we've certainly found that there is a demand for egg whites, but the supply is stable," Cargill said.

However, stocks of dried egg whites have plunged by 46 percent in the past year, USDA data indicate. At 1.7m lb, dried stocks are below slim levels reached during the height of the protein-heavy Atkins diet craze in 2004, Mr. Brown said.

Some consumers report difficulty obtaining egg whites—also known as albumen—at affordable prices. Boulder Brands, a New York-listed food company, told investors it was working to become less dependent on egg whites as an ingredient after a threefold rise in costs hit its gluten-free bread business.

— By The Financial Times' Gregory Meyer

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