Egg Shelves

Why are eggs so expensive this year?

Many grocery items are becoming more expensive in recent years. However, nothing can compare to the increase in egg prices.

According to data from the Bureau of Labor Statistics, egg prices rose 49% between November and December, without being adjusted for seasonal swings.

A deadly avian influenza epidemic has decimated poultry flocks since early 2011. It affected both turkeys as well as egg-laying chickens. This is one reason why prices have continued to rise. The situation is made worse by high feed and energy costs for producers as well as the high demand at the supermarket.

Experts believe that the peak is over, but you can still expect to pay more for eggs at the grocery store until the conditions improve.

Record-breaking wholesale prices

Although Avian flu has been a problem for many months in the US, wholesale prices have been at an all-time high in recent weeks.

According to Karyn Rispoli (editor of the Egg Price Current for Urner Bary), prices have been rising for nine weeks straight…setting new records daily ever since the week before Thanksgiving.”

Rispoli, citing Urner Barry data, stated that Friday’s price of Midwest large eggs, which is the benchmark for eggs in their shells, was $5.46 per dozen. Urner Berry’s data indicates that this price was about $1.70 last year.

The reason is simple: There is not enough supply.

Rispoli stated that there has been insufficient production to meet the demand for the product. The deadly bird flu has strained the supply.

The current highly-pathogenic Avian Influenza outbreak began in February and has continued throughout the year. 2015 was the last time there had been a major bird flu epidemic in the United States. Brian Earnest, CoBank’s lead economist for animal proteins, stated that the last major bird flu outbreak in the United States was in 2015.

He said that “this year, we have continued to witness flock depopulations throughout all of the year” and that there is an expectation that it will continue into 2023. He also noted that he believes that “we’ll see tight supply and an elevated pricing environment moving forward.”

According to the USDA, 60 million birds have been killed by the disease. According to data from the USDA, 43 million of those are egg-laying birds, which is a group that is funded by farmers and markets eggs.

Farmers have managed to minimize their losses. Emily Metz, American Egg Board CEO, said that “our producers learned a lot from 2015.” Some farmers have been able to repopulate their flocks, reducing the impact on egg supply and flock size. According to USDA, about 308 million hens were laying eggs as of December. This is down from 328 million in December 2021.

Metz said that the supply squeeze is not the only factor contributing to higher egg prices. She said that wholesale prices are also rising due to higher fuel, feed, and other producer costs. Then there is the high demand for eggs which spikes at this time of the year.

Egg demand remains high

When people are baking more and making breakfast at home, they tend to buy more eggs.

These habits are responsible for the rise in wholesale prices during winter, according to Earnest. This has created a strong market.

Strong year-round egg demand has also been a factor.

According to IRI data, which is a market research firm, even though prices have increased, egg sales have fallen by only 2% per unit in retail over the year to December 4th.

As they cut back on restaurant visits, shoppers have accepted high grocery store prices. Even though eggs are more expensive than other protein options, they still have a lower price.

Wholesale prices will fall as peak holiday demand is over.

Rispoli stated that “based on current market conditions and trade values, it seems that the market may finally have reached its peak.” She stated that Friday’s wholesale price was the same as Thursday’s. This is the first time prices have remained stable since October.

She said that “multiple suppliers have reported to [us] that they are experiencing slow orders” in the week leading to Christmas. “Most grocers have already pulled in all the inventory they will need for Christmas.”

It could take three to six more months for retail prices to stabilize, according to KK Davey (president of thought leadership at NPD and IRI), and even longer get prices down to last year’s levels.

He said, “It might take some time.”

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