Cracking Under Pressure: The Surprising Reason Egg Prices Are Soaring Despite Falling US Inflation

Currently, data from the U.S. Bureau of Labor Statistics shows that the average price of a dozen eggs is $3.20, which remains high. (Image source: Adobe Stock) Looking at Chinese websites, it is prohibited to create mirror websites. Return to the genuine Chinese website.

[Watch China September 25, 2024](Translated by Watch China reporter Luke) Supermarket prices are no longer skyrocketing – of course, if you buy eggs, that’s a different story.Egg pricesCompared to 12 months agoriseThe 28.1% increase was easily the highest among all food items tracked by the Bureau of Labor Statistics. While overall food prices barely budged (up less than 1% year-over-year in August), and theinflationThe rate has also eased, but the price of eggs still surprises consumers. It is forbidden to create mirror websites on Chinese websites. Return to the genuine Chinese website.

The main reason for the increase in egg prices is well known: bird flu.

The decline in poultry herds due to the outbreak of avian influenza has reduced the supply of eggs in supermarkets and increased their prices.

“Bird flu is absolutely the main reason for the increase in egg prices,” said Phil Lempert, grocery industry analyst and editor of SuperMarketGuru.com.

Egg supply continues to decline

Highly pathogenic avian influenza (HPAI), also known as bird flu, has affected nearly 101 million birds in 48 states since January 2022, according to the Centers for Disease Control and Prevention (CDC).

“Think about the way they are kept: lots of chickens in small spaces,” Lempert said. “If one chicken gets infected, the whole flock has to be culled, and that’s the problem.”

Total egg production fell 2.6% in July from a year earlier, according to new data released this week by the U.S. Department of Agriculture.

The USDA also found that the number of egg-laying hens has fallen for two consecutive months.

“We will closely monitor the impact of avian influenza on prices,” the USDA said in August, adding that avian influenza “is one reason egg prices have increased this summer as the number of egg-laying hen flocks in the U.S. has declined.”

The good news is that eggs are much cheaper than they were in late 2022 and early 2023, when avian flu triggered a price spike that sent the average price of a dozen Grade A large eggs to a record high of $4.82, according to the Bureau of Labor Statistics.

Brian Moscogiuri, vice president of Eggs Unlimited, a leading egg supplier, told CNN in an email that overall inflationary pressures and feed prices have “eased” since that tough period.

“However, it will take time and without major supply disruptions before we can resume production,” he said.

Regions with the biggest increases in egg prices

Currently, the average price of a dozen eggs is $3.20, according to the U.S. Bureau of Labor Statistics, which remains high. Before the COVID-19 pandemic, the price of eggs in the United States had never exceeded $3.

Americans are paying nearly double what they were paying before the pandemic for eggs, with average prices having surged 83% since October 2019, according to market intelligence platform Datasembly.

Datasembly said consumers in some states faced even larger increases, with the biggest increases in Minnesota (+137%), Missouri (+123%), Iowa (+116%), Oklahoma (+109%) and Alabama (+109%).

According to Datasembly, states with the biggest increases in egg prices were Hawaii (+49%), Minnesota (+44%) and Alabama (+38%).

Prices are rising so quickly that some consumers are having to pause and reconsider their purchasing choices.

Moscogiuri said previously strong demand had taken a hit in recent weeks as retailers passed on higher wholesale prices to consumers.

However, wholesale prices have recently begun to fall significantly, which is expected to eventually benefit consumers.

“If there are no new outbreaks of avian flu in the next six to eight months, the market should return to more normal long-term averages,” Moscogiuri said.

However, Kevin Bergquist, sector manager at the Wells Fargo Agri-Food Institute, warned in a recent report that if avian flu continues to spread, egg prices could continue to rise this fall and during the holiday season.

“No buffer”

Part of the problem may be consolidation in the industry. Like other industries, the egg industry has experienced a wave of mergers that has led to greater reliance on a few large producers.

As of 2020, the five largest egg companies in the United States controlled 36% to 40% of the nation’s egg-laying hens, according to a recent report released by Farm Action, an organization that opposes corporate monopolies.

Cal-Maine Foods, the largest egg producer in the United States, controls about one-fifth of egg sales in the United States through multiple acquisitions. When egg prices soared to an all-time high in early 2023, Cal-Maine’s profits soared 718%. Cal-Maine did not respond to CNN’s request for comment.

“High egg prices in 2022 and 2023 are the result of price gouging by dominant egg producers, who are using the excuse of inflation and avian flu to extract profit margins of up to 40 percent on every dozen eggs sold,” the Farm Action report concluded.

Basel Musharbash, managing attorney at Anti Monopoly Counsel, a Texas-based antitrust law and policy firm, told CNN that industry consolidation has allowed egg producers to profit from supply shocks.

“There is no cushion. Whenever there is a shock, there is a supply shortage problem, which keeps prices high for a long time,” Musharbash said.

Emily Metz, president and CEO of the American Egg Board, the national marketing organization for egg growers, disputed that view, noting that there are more than 3,250 commercial chicken farms in the U.S. and hundreds of brands to choose from.

“The egg price volatility we’ve seen is driven by a variety of factors, most of which are beyond the control of chicken farmers,” Metz told CNN in an email. She cited avian flu, strong demand and rising costs for feed, labor, fuel and packaging.

“America’s chicken farmers are doing everything they can to keep costs down while ensuring they provide consumers with safe, healthy, high-quality eggs,” Metz said.

Low-income consumers are most affected

The surge in egg prices has hit low-income families particularly hard.

Consumers who rely on food assistance programs such as SNAP often turn to eggs as a primary source of protein because they are generally cheaper than meat, said Lempert, the grocery industry analyst.

“When budgets are tight, going from $2 a dozen to $4 or $5 a dozen is a big jump,” he said. “With prices so high, I worry these people may not be getting enough protein.”

Source: Watch China

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