Why Are Egg Prices Still So High? It’s Not The Reason You Think

Food & Drink

Topline

The median cost of a dozen eggs in the U.S. remains $4.25—over twice what it was a year ago—and while increased inflation in 2022 has contributed somewhat, the real reason egg costs remain high (as inflation otherwise eases) is an avian flu that has decimated chicken farmers, causing as many as 57 million chickens to be affected.

Key Facts

In a report from the U.S. Department of Agriculture that tracks food price outlook, eggs have risen up to 59% in December 2022, the highest year over year rise in prices among food items.

The main reason egg prices remain high is the spread of an avian influenza virus which started in early 2022 and has already affected more birds than the 2015 outbreak, according to the Centers for Disease Control.

The avian flu affects more than 100 species of birds and can spread quickly, with a mortality rate of 90% to 100% in chickens, according to the CDC.

So far, there have been 57 million birds culled because of the influenza virus across 47 states, according to data from the USDA, compared to the 50 million birds affected across 21 states in 2015.

Avian influenza does occur from time to time and has been associated with human death in Asia, Africa, Europe, the Pacific and, while rare, some cases of the avian flu have caused illness in North America, says the CDC.

In December, when egg demand was at an all-time high due to the beginning of the holiday season—and with inflation still high—the median price for a dozen eggs across the country was at $4.25, more than twice the year before ($1.78), according to data from the U.S. Bureau of Labor Statistics.

In some states, like California, egg prices are as high as $7 for a dozen, mainly attributed to a state law which requires egg producers to raise cage-free hens, that went into effect last year and so far, the bird flu has killed 4 million cage-free hens alone keeping supplies low as demand remained high.

Consumer eating habits also play a part in the sudden rise in egg prices as egg consumption has risen 17% between 2012 and 2021 according to a report from the USDA and has even outpaced red meats.

As consumers wind down their egg consumption after the holidays, egg prices will begin to lower as egg producers have more time to stock up and focus on how to deal with the avian influenza virus before the next holiday demand in April according to an egg market overview by the USDA.

Surprising Fact

While the cage-free requirement has kept California egg prices high, in other states that have more lax rules for egg producers, organic or cage free might actually be the cheaper option. An earning report from Cal-Maine Foods, a top U.S. wholesale egg producer, noted conventional eggs went from $1.15 in 2021 to $2.88 in 2022 while specialty eggs (organic or cage-free) went from $1.81 in 2021 to only $2.37 in 2022.

Crucial Quote

“The flu is the most important factor affecting egg prices,” said Maro Ibarburu, a business analyst at the Egg Industry Center at Iowa State University told The Washington Post. “We need to see if more birds are affected by influenza. In the event we get the outbreak under control, it will be better every month,” he said about egg prices.

Key Background

The avian influenza which has affected a majority of bird and egg producers across the U.S. started in February with Iowa, the largest egg producer in the U.S., hit the hardest. The previous outbreak, which lasted between initial detection of the HPAI virus in December 2014 and final detection June 2015, had been one of the most significant animal health events in the U.S., according to a report from the USDA. A recent eggs market overview report from the USDA says that while wholesale prices of carton eggs begins to lower and demand loosens from holiday levels, consumer demand remains higher entering the new year compared to 2022, and average price is $4.25 per dozen.

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