What’s Cracking with Egg Prices?
By Jessica Carroll, Women in Agribusiness Media (February 14, 2023)
Recently there has been a large spike in the price of a household staple - eggs - that took consumers by surprise. From December 2021 to December 2022, there was a 138 percent increase in the price of eggs (Morgan). How could it jump so high so quickly? The answer is a perfect recipe for sticker shock - multiple bird flu outbreaks, high demand in the holiday baking season, and high input costs, which ultimately are causing a surge across the board in most food prices.
During 2022, there were widespread outbreaks of Avian Influenza that decimated flocks across the U.S. In November, it was estimated by the CDC that over 49 million fowl had either been culled or died directly from the virus (Centers for Disease Control and Prevention). The USDA estimated that 43 million laying hens were affected by the bird flu, causing egg inventories to drop 29 percent throughout the year (Morgan). It is safe to say that the 2022 Avian Influenza outbreak, which was the worst U.S. outbreak on record, was a primary driving force in the national average increase in the price of a dozen eggs from $1.72 to $3.59 (Ikeda).
In addition to bird flu outbreaks, high input costs played a large role in the price jumps. Feed for the hens, fuel to transport the eggs, and natural gas to heat the poultry houses all contributed (Morgan; Brothers). The second wave of the bird flu hit during the last quarter of 2022 and put additional strain on the egg industry, which had not fully recovered from the first wave of the virus. Also, the holiday baking season was in full swing during the second wave, which depleted inventories even more (Morgan).
To explain the situation, economists refer back to the laws of supply and demand. The demand for eggs is very inelastic, which means that consumers will continue to purchase them almost regardless of how much they cost (Morgan). A positive aspect to point out is that consumer demand for eggs usually decreases during the first few months of the year, which could alleviate some of the strain on the industry (Iacurci).
There some who question if the price spikes were due to the previous factors mentioned, or rather collusion among industry leaders. The egg market is fiercely competitive and can be quite volatile. However, Farm Action, a non-governmental organization (NGO) that provides farmers with support and protection, does not believe that is the case in this circumstance. The NGO contacted the Federal Trade Commission and requested that it investigate the current situation in the egg industry (Ikeda).
There might be a glimmer of hope in the future though, but it is not guaranteed. Wholesale egg prices have decreased steadily from the peak in December 2022. This decline could open the door for retailers to pass the lower prices on to consumers. There is a lag between wholesale and retail price changes, so it could take several weeks until consumers’ wallets feel the difference. Easter is coming soon. This brings another increase in consumer demand for eggs, which could bring more uncertainty into the equation (Iacurci).
About the Author
Jessica Carroll is the operations manager for the Agribusiness Division at HighQuest Partners. She obtained a Bachelor of Science in Equine Studies and Agribusiness from Texas A&M University - Commerce, and a Master of Agribusiness from Texas A&M University.
Agriculture and writing have been two of her greatest passions throughout her life, evidenced by numerous leadership positions in organizations such as 4-H, Sigma Alpha, and TAMUC’s Equestrian Team. During high school and college, Carroll completed internships in animal health, strategic intelligence, and marketing, which allowed her to explore various forms of writing and communication. In her spare time, she enjoys hiking and kayaking with her little Corgi, Howdy.
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