A few months ago, I asked Vox readers about the price increases that bother them most amid our current hyperinflationary economic environment. The most popular answer, far and away, was eggs—a relatively small, but essential, item whose high price was irksome to many consumers. That was in August 2022. Now, the egg price situation is even worse.
According to data provided by Urner Barry, which tracks the food commodities market, the average price for a dozen “Great Midwest” eggs was $5.46 as of late December 2022, much higher than the $0.89 it was at the beginning of 2020, before The pandemic hit, and even above other highs in the low $3 range last summer. After the peak demand for eggs that comes with the holiday season, prices have begun to ease, back to $3.64 as of Jan. 17.
“There is almost a steady drop in demand after the holiday baking period, which in turn leads to lower wholesale prices,” Karen Rispoli, who covers the egg market for Urner Barry, said in an email. “This year’s pullback has been fairly sharp despite the highs from which the market is adjusting.”
However, the egg prices many people see in the grocery store are eye-catching. And in some parts of the country, like California, eggs are very expensive and in some cases hard to find.
Whites have been part of the inflation story in the US economy for months. In addition to the cost of one egg at the store, you also need to remember that eggs are an ingredient in many items, from pet food to baked goods and more. So when the cost of eggs goes up, it can stress out a lot of things.
So what is happening now? Here is a little rundown.
Bird flu is bad
Eggs are expensive mainly at the moment because chickens are getting sick from the very deadly bird flu, which is spread largely by migratory wild birds. The last time avian flu hit hard, in 2015, it sent egg prices soaring. Now, it’s happening again, and it’s proving even more consistent than last time.
In 2015, the virus kind of stopped once the weather got hot and spring migration ended, and resettlement was fully able to begin. [In 2022]”It’s back in the fall with the winter migration,” said Brian Moscogiuri, global trade strategist at Eggs Unlimited.
As of early December, there were about 308 million “hens” in the United States, that is, hens that lay eggs for consumption. This is down from 328 million in the previous year. “Usually you need about one bird per person to get supply and demand close to equilibrium with US consumption,” Moscogiuri said. “So we have, 331 million people in this country? You can see there is a huge deficit.”
As Vox’s Kenny Torella points out, nearly 58 million birds in the United States, mostly laying hens, died of bird flu over the past year, far higher than the previous record of 50 million from 2015. Once it becomes a farm or A facility infected with the virus, it spreads like wildfire and is almost always deadly. Regardless, US regulations require farmers to vacate their operations as soon as bird flu is detected, which means birds with or without the virus must be killed.
They have to clean and sanitize the entire facility, and then they have to take the test [the facility] in order to re-populate [to make sure the virus is cleared]Moscogeore said. Egg producers have gotten better at rehoming, having learned from the experience in 2015, but as mentioned, the current outbreak is more persistent than the past.
The bird flu outbreak in 2022 coincided with a hot season for eggs with consumers, leading to some perfect storm on pricing. “The latest outbreak came at a time when the industry is seasonally adjusting the egg season to meet the increased egg demand associated with the winter holiday season,” the USDA wrote in a recent research note. “Lower than normal stocks of shell eggs near the end of the year, combined with increased demand caused by the holiday baking season, led to several consecutive weeks of record high egg prices.”
Inflation remains an issue and the economy is a bit choppy
While the bird flu is the main culprit in the current surge in egg prices, there are other factors at play as well – ones that have plagued the egg market and the broader economy for months now. Inflation seems to be slowing in some areas, but it’s still high, and a lot of things are very expensive.
“Just like with all the other items in the grocery store, there’s all this inflationary pressure, with interest rates, with oil, feed prices, raw materials, packaging, cartons, transportation. You have labor issues and labor-related costs,” Moscogiuri said. “.
I wrote an explainer on eggs and inflation in early 2022 that addressed a lot of these issues. Sam Crouse, vice president of business development for MPS Egg Farms, which is headquartered in Indiana, told me an egg costs more than half a feed. As corn and soybean prices fluctuate, so do egg prices. Changes in fuel prices and packaging – cartons, corrugated boxes and plastic wrap – can affect the final price of eggs. Demand affects things, too. The holiday season may be over, but Easter, another time of year where white consumers get in on the action, is about to.
It is often more expensive to be nice to the chickens, which can drive up the price of cage-free eggs. In California, a law took effect last year that requires all eggs sold in the state to be from cage-free hens. Massachusetts has a new law tightening standards around egg production, and some companies have introduced cage-free commitments as well. As the Los Angeles Times recently noted, cage-free chickens are somewhat likely to come into contact with wild birds that can infect them with bird flu, although both cage-free and closed chickens contract the virus at similar rates. (It’s worth noting that amid the weirdness of the current egg market, premium eggs were sometimes the better deal, but that’s not generally the case.)
Will the whites have a major downfall?
As we mentioned at the top, egg prices are starting to ease, although what happens in the wholesale market isn’t always directly and immediately reflected in the grocery aisle. As the Wall Street Journal notes, some grocery stores have tried to keep egg prices “competitive,” even if that means sacrificing some profits, because they’re a staple for consumers and good for attracting people. For many of the stores that raised prices, there will likely be a delay in bringing them back down as well.
“There is usually a two to three week delay between wholesale pricing and what consumers see in terms of retail pricing,” Rispoli said. “This, however, assumes that retailers are passing on those lower costs. Since many retailers were selling eggs below cost when the market rose to record highs last month, they may have reacted slower on the way down.”
The good news, if you’re a true egghead (I’m sorry), is that there are generally eggs on the shelves. The magazine reported that there was an “intermittent shortage” of eggs, but not one that was severe and widespread. Some regional grocery chains in places like north carolina and colorado have dealt with occasional shortages, or in some cases, specialty or organic eggs have been hard to come by. Overall, egg producers have been smarter at rebuilding their farms and recovering from avian flu outbreaks than they were in 2015.
All that said, the weather will soon start to warm, which means that wild birds begin to migrate again, creating a greater possibility of infection. Producers are getting better at protecting their flocks from avian influenza, but they’re not perfect. (Plus, notes Torella, a good approach here might be to start by giving the chickens a vaccine.) In the world of eggs, the worry isn’t that winter is coming, it’s spring.
“We hope that the resettlement continues and more production is on the way to increase, and we don’t see more anymore [bird flu] As we return to migration this spring again, the worst is behind us,” Moscogeore said. “But we really don’t know.”