The cost of eggs in supermarkets has seen a dramatic rise recently.
While most grocery prices have stabilised, eggs remain an outlier with a significant price hike from the previous year.
Impact of Avian Influenza
Egg prices have increased by 28.1% over the past year, primarily due to bird flu. This surge is notable as overall grocery prices have remained relatively stable, increasing by less than 1% over the same period.
The main factor driving this increase is the outbreak of highly pathogenic avian influenza (HPAI), commonly known as bird flu. According to the Centers for Disease Control and Prevention (CDC), HPAI has affected nearly 101 million birds across 48 US states since January 2022.
Decline in Egg Production
The bird flu has led to a decrease in egg production. When a chicken contracts bird flu, the entire flock often must be culled to prevent the spread of the disease.
Total egg production fell by 2.6% in July year-over-year, and the number of egg-laying birds has dropped for the second consecutive month, according to the USDA. These declines have contributed to elevated egg prices.
Regional Price Variations
The average price of eggs currently stands at $3.20 per dozen, which remains elevated compared to pre-COVID levels.
Certain states have experienced even more significant price increases. For example, Minnesota and Missouri have seen price hikes of 137% and 123%, respectively, over the past year.
These regional variations highlight the uneven impact of the price surge. Some areas have faced more severe disruptions, affecting local economies differently.
Consolidation in the Egg Industry
Industry consolidation is another factor contributing to the current situation. The egg industry has seen a wave of mergers, resulting in a market dominated by a few large producers.
As of 2020, the five biggest egg companies controlled between 36% and 40% of all egg-laying hens in the U.S. Cal-Maine Foods, the largest egg producer, now controls about one-fifth of national egg sales. According to a report by Farm Action, this has led to price gouging by dominant producers.
Implications for Low-Income Shoppers
The rise in egg prices disproportionately affects lower-income families. Eggs are a primary protein source for many consumers on food assistance programs like SNAP.
When the price of a dozen eggs doubles, it places a significant burden on these households. There is a genuine concern that high prices could lead to inadequate protein intake among this population.
Future Outlook
There is some optimism that egg prices may stabilise if the bird flu outbreak can be controlled. Wholesale prices have recently shown signs of easing, which could eventually benefit consumers.
However, experts caution that any further outbreaks this fall and holiday season could cause prices to rise again. The situation remains precarious, emphasising the need for vigilance and effective disease management.
Industry Responses
The egg industry is making efforts to manage costs and maintain supply. Despite accusations of price gouging, industry representatives argue that many factors contributing to price volatility are beyond farmers’ control.
Costs for feed, labour, fuel, and packaging have all increased, adding pressure on egg prices. Farmers are working to minimise these costs while ensuring a steady supply of quality eggs.
In conclusion, the recent spike in egg prices can be attributed to multiple factors, including bird flu, industry consolidation, and rising production costs.
While there is hope for stabilisation, the potential for further outbreaks necessitates ongoing monitoring and responsive measures to protect both supply and consumer interests.
