A few months ago, I asked Vox readers which price increases bothered them the most in the midst of our current high-inflation economic environment. The most common response, by far, was eggs, a relatively low-priced item, but a staple food, and whose price increases upset 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 products market, the average price of a dozen “Midwestern Large” eggs was as high as $5.46 as of the end of December 2022, well above $ 0.89 in early 2020, before the pandemic hit, and even above other highs in the low $3 range last summer. Following the peak demand for eggs that comes with the holiday season, prices have begun to cool, falling back to $3.64 on January 17.
“There is almost invariably a drop in demand after the holiday cooking period, which in turn drives down wholesale prices,” Karyn Rispoli, who covers the egg market for Urner Barry, said in an email. “However, this year’s drop has been quite steep due to the heights from which the market is adjusting.”
Still, the egg prices that many people are seeing in the grocery store are staggering. And in some parts of the country, like California, eggs are very expensive and in some cases hard to find.
Eggs have been part of the inflation story of the US economy for months. Beyond the cost of an individual egg at the store, you should also 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, that can put pressure on a lot of things.
So what is happening now? Here’s a little summary.
bird flu is bad
Eggs are mostly more expensive right now because chickens keep getting sick with super-deadly bird flu, much of it spread by migrating wild birds. The last time bird flu hit so hard, in 2015, it sent egg prices skyrocketing. Now, that’s happening again, and it’s proving more persistent than last time.
“In 2015, the virus stopped once the weather increased and the spring migration ended, and repopulation was able to fully begin. [In 2022]it has come 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 “layers”—that is, hens that lay eggs for food—in the US. That’s down from 328 million a year earlier. “Typically, you need about one bird per person to have supply and demand almost in balance with US consumption,” Moscogiuri said. “So we have, what, 331 million people in this country? You can see right there, there’s a huge deficit.”
As Vox’s Kenny Torrella explained, nearly 58 million birds in the US, most of them laying hens, have died from bird flu in the past year, well above the previous record of 50 million set in 2015. Once a farm or facility is infected with the virus, it spreads like wildfire and is almost always deadly. Regardless, US regulations require farmers to vacate their operations once bird flu is detected, meaning birds with and without the virus must be culled.
“They have to clean and disinfect the entire facility, and then they have to test [the facility] to repopulate [to make sure the virus is cleared]Moscogiuri said. Egg producers have gotten better at stocking, having learned from the experience in 2015, but as mentioned, the current outbreak is much more persistent than the last.
The bird flu outbreak in 2022 coincided with a peak season for eggs among consumers, causing something of a perfect storm in prices. “The latest wave of outbreaks came at a time when the industry is seasonally adjusting egg flocks to meet the increased demand for eggs associated with the winter holiday season,” the USDA wrote in a recent research note. “Lower than usual shell egg inventories near the end of the year, combined with increased demand stemming from the holiday baking season, resulted in several successive weeks of record egg prices.”
Inflation is still a problem and the economy is a bit shaky
While bird flu is the main cause of the current surge in egg prices, there are other factors at play as well, factors that have dogged the egg market and the broader economy for months. Inflation seems to be cooling off in some areas, but it remains high and many things are more expensive.
“Just like with every other item in the grocery store, there is all this inflationary pressure, with interest rates, with oil, with food prices, with raw materials, with packaging, cardboard, transport. You have labor issues and costs associated with labor,” Moscogiuri said.
I wrote an explanatory article on eggs and inflation in early 2022 that touched on many of these topics. The cost of an egg is more than half the feed, Sam Krouse, Indiana-based vice president of business development for MPS Egg Farms, told me at the time. As the costs of corn and soybean meal fluctuate, so do the prices of eggs. Changes in the prices of fuel and packaging (cartons, corrugated boxes and plastic wrap) can affect the final price of eggs. Demand also affects things. The holiday season may be over, but Easter, another time of year when consumers eat eggs, is just around the corner.
It’s often more expensive to be nice to the chickens, which can lead to higher prices for cage-free eggs. In California, a law went into effect last year requiring all eggs sold in the state to be from cage-free hens. Massachusetts has a new law tightening standards around egg production, and some corporations have also committed to going cage-free. As the Los Angeles Times recently noted, cage-free hens are more likely to come into contact with wild birds that can infect them with bird flu, although both cage-free and cage-free hens have contracted the virus at similar rates. (It’s worth noting that amid the current rarity of the egg market, specialty eggs have sometimes been the best deal, but that’s generally not the case.)
Will the eggs have a big drop?
As mentioned above, egg prices are starting to come down, although what happens in the wholesale market is not always directly and immediately reflected in the supermarket aisle. As the Wall Street Journal points out, some grocery stores have tried to keep egg prices “competitive,” even if it means sacrificing some profit, because they’re a consumer staple and good at getting people in the door. For the many stores that have raised prices, there will likely be delays in lowering prices as well.
“Typically, there is a two to three week lag between wholesale prices and what consumers see in terms of retail prices,” Rispoli said. “That, however, assumes that retailers are passing on those lower costs. With many retailers selling eggs below cost when the market soared to record levels last month, they may be slower to react in the event of a dip.”
The good news, if you’re a true egghead (sorry), is that there are usually eggs on the shelves. The Journal reports that there have been “patchy shortages” of eggs, but not one that is very widespread and widespread. Some regional supermarket chains in places like North Carolina and Colorado have faced occasional shortages or, in some cases, it has been a little more difficult to get specialty or organic eggs. Overall, though, egg producers have been quicker to restock their farms and recover from bird flu outbreaks than they were in 2015.
All this said, the weather will soon start to warm up, which means that wild bird migration begins once more, creating more chances for infections. Producers are getting better at protecting their flocks from bird flu, but they aren’t perfect. (Also, as Torrella points out, maybe the way to get really good here is to start vaccinating the chickens.) In the world of eggs, the concern is not that winter arrives, but that spring arrives.
“Hopefully, the stocking continues and more production is on the way, and we don’t see more [bird flu] as we return to this spring migration again, and the worst is behind us,” Moscogiuri said. “But we really don’t know.”