The U.S. government reversed its outlook for bigger egg production this year and now expects that output will fall for the first time since 2008 after the worst domestic outbreak of bird flu ever killed millions of hens.

Production will drop 0.1 percent to 8.323 billion dozen in 2015, the U.S. Department of Agriculture said Tuesday. In April, the agency estimated output would rise 0.9 percent to 8.41 billion, which would have been a record in data since 1990.

The forecast was cut because highly pathogenic avian influenza “will constrain production growth,” the USDA said in a report. The estimate includes eggs sold in grocery stores and those that are hatched.

Egg-laying hens have been the biggest victims of the outbreak that’s swept through American poultry farms, infecting flocks of more than 30 million chickens, turkeys and other birds. More than three-quarters of those have been in Iowa, the country’s top egg producer. At stake is the more than $10 billion produced annually from egg production, USDA figures show.

While the USDA left its 2015 forecast for egg prices unchanged at $1.30 to $1.36 a dozen, there are signs that tighter supplies are increasing some costs. As of May 6, breaker eggs, which are cracked and sold as liquid, fetched 87 cents a dozen, according to Urner Barry, the Toms River, New Jersey- based commodity researcher. That’s up 38 percent from April 22.

Shipment Restrictions

Total poultry and egg output was valued at $48 billion in 2014. Buyers in the Middle East and Asia have placed restrictions on American exports, while governors in Iowa, Minnesota and Wisconsin have declared states of emergency in response to the outbreak. Birds in flocks with the virus are destroyed, and none of the animals enter the food chain, the USDA has said.

Bird flu will also limit turkey output this year. The agency lowered its forecast for production by 0.8 percent to 5.979 billion from April. Still, that’s 3.9 percent higher than 2014.

“Previously forecast production growth is expected to be limited,” the USDA said.

About 4 million turkeys have died from avian influenza in Minnesota, the top U.S. producer.

–With assistance from Lydia Mulvany in Chicago.