Key Takeaways

  • Egg prices have been stable for the past 40 years as supply and demand have been in sync.
  • When supply issues occur, like with a bird flu outbreak, egg prices spike for a brief period.
  • Today, inflation, supply chain issues, and a severe bird flu outbreak are causing egg prices to hit price levels never seen before.

If you’ve been to the grocery store lately, you’ve noticed that everything is more expensive. But the price of one item, in particular, has shocked many people. Eggs. For decades, eggs have been one of the least expensive foods you could buy at the supermarket, but not anymore. Why has the price of eggs skyrocketed, and will prices ever come back down? Here is what you need to know about this favorite breakfast food.

The history of egg prices

Eggs have always been a staple due to their high nutritional value and relative low cost. In 1980, the average price of a dozen large, Grade A eggs in U.S. cities was $0.84. Fast forward to 2000, and the same dozen eggs cost an average of $0.91. Over those 20 years, prices fluctuated but averaged between a high of $1.32 and a low of $0.68.

From 2000 through 2015, the price of a dozen grade A large eggs steadily increased from $0.91 to a peak of $2.97 in September of 2015, when a significant bird flu outbreak occurred. After that, the price fell sharply to $1.32 in November 2016. Prices remained stable until the current economic environment, except for a peak in 2018 due to another bird flu outbreak and another peak in 2020 from the pandemic.

In October, the average price of eggs in U.S. cities was $3.42 nationally, but some areas of the country have seen prices hit $4 a dozen. Before this, the highest average price for a dozen eggs was $2.97 in September 2015.

Inflation

Inflation, believe it or not, impacts farms and, more specifically, chickens. The more it costs to feed and raise chickens, the more it costs to buy eggs and chicken meat at the grocery store, as farms pass their higher costs onto consumers.

Supply issues also impact the price of eggs. If the annual strain of bird flu is severe, it can cause egg prices to rise because the supply of both chickens and eggs drops significantly. With demand still high but less supply, prices rise.

Today, egg prices are not only impacted by inflation.

Bird flu outbreak

The bird flu, or avian flu, is deadly to chickens, and the majority that get infected will quickly pass away. So when there is an outbreak, the supply of chickens decreases, and with a smaller amount of chickens laying eggs, there is also a smaller supply of eggs.

It is important to know that just like the human version of the flu, the bird flu recurs annually, typically in the autumn months. The outbreak’s severity varies by year, with most years being mild and others becoming more severe.

According to the USDA, egg production in August 2022 was down 2% year-over-year, or close to 200 million eggs, due to a worse-than-usual bird flu outbreak. The good news was that 56 million egg-type chicks hatched in August, a 13% increase compared to the same period the previous year.

In September, egg production totaled 8.83 billion, a 3% decline year-over-year. Egg-type chicks hatched for the month totaled 53 million, up 7% year-over-year. While recovering the drop in egg production will take time, normal production levels should return soon.

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Supply chain issues

While the bird flu reduces the number of eggs that can be shipped, there have also been supply chain issues, including the increased cost of diesel gas and a decreased workforce. This makes it more difficult and expensive to get eggs from farms and onto grocery store shelves.

The good news is that supply chain issues are within our control. More workers can be employed, and with the Federal Reserve raising interest rates, prices will hopefully come down. This includes the cost of diesel fuel.

Where egg prices are headed

It’s no wonder that egg prices would increase with higher feed costs, supply chain issues, and the bird flu. The question is, will these high prices remain? The increased cost of feeding chickens will keep egg prices elevated as long as inflation remains high. However, supply chain issues are easing, and the bird flu outbreak will pass. This will help to bring egg prices back down.

In 2015, there was a major bird flu outbreak in the United States. This spiked egg prices from $2.13 per dozen in March to $2.97 per dozen in September, an increase of 39%. Fast forward to June 2016, and egg prices dropped to $1.49 per dozen. Egg prices fell further in November 2016 to stand at $1.32 a dozen.

Prices remained low until 2018 when bird flu outbreaks occurred in countries like South Korea, South Africa, the Philippines, and the Netherlands. Prices dropped again, only to rise in 2020 due to the pandemic.

In the past, when the bird flu or pandemic eased, egg prices came back down. There is no reason not to believe the same thing won’t happen this time as well. The only difference is that currently, we are in a perfect storm, with other issues impacting the price of eggs. The most likely scenario is that it will take longer for prices to lower considerably, perhaps until all three aforementioned issues are resolved. But prices will hopefully ease some as the bird flu outbreak slows.

Bottom Line

The cost of everything is rising from inflation, and when other events happen, like a bird flu outbreak, it only worsens the pain at the grocery store. The good news is the increase in the cost of eggs should be short-lived, letting people return to enjoying their favorite breakfast food at a lower price again soon.

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