Dreaming of eating a full English breakfast is now an ‘eggs-orbitant’ idea in the United States. According to data provided, average egg prices jumped 49.1 per cent in November 2022 compared to a year earlier — the largest annual percentage increase among all grocery items in that period.
Today, Americans have to shell out $3.59 (Rs 293) for a dozen Grade A eggs compared to $1.72 (Rs 140) in November 2021. Interestingly, the prices of eggs have never seen such a rise since 1973.
As David Ortega, a Michigan State University food economist, was quoted as saying, “That’s the highest increase in any one food category at the grocery store. It’s pretty stark when you see those price increases.”
But what’s the reason behind the soaring egg prices?
Graphic: Pranay Bhardwaj
Deadly bird flu to blame
One of the main driving factors behind the rising egg prices is the spread of an avian influenza virus, which started in early 2022. The current outbreak of Highly-Pathogenic Avian Influenza started in the US around February, and has persisted throughout the year.
A report by the Centers for Disease Control and Prevention (CDC) said that nearly 58 million birds, including more than 40 million egg-laying hens, died across the country owing to the Highly pathogenic avian influenza (HPAI) A(H5) virus.
The US hasn’t seen such an outbreak of avian flu since 2015. But that one was contained by June of that year.
It is important to note here that avian flu is “highly contagious,” and according to US law, farmers have to kill their remaining birds too if an outbreak has been reported from one location.
Also read: Why Qatar is buying more eggs from Tamil Nadu this World Cup
Owing to this, egg production dipped down to 8.87 billion eggs in November 2022 from over 9.3 billion eggs a year ago, as per the data released by the US Department of Agriculture.
Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, California, was quoted as telling CNBC, “It’s a supply disruption, ‘act of God’ type stuff.”
Owing to the deadly avian flu outbreak, egg production has dipped in the US down to 8.87 billion eggs in November 2022 from over 9.3 billion eggs a year ago. AP
Input costs soar
Besides the avian flu to blame for the rise in egg prices, other inflationary pressures like energy, transportation and feed costs have also pushed up prices. President and CEO of the American Egg Board trade group, Emily Metz told the Associated Press that all the cost increases farmers have faced in the past year was a huge factor in the price increases.
“When you’re looking at fuel costs go up, and you’re looking at feed costs go up as much as 60 per cent, labour costs, packaging costs — all of that … those are much bigger factors than bird flu for sure,” Metz said.
It is a known fact that the Russia-Ukraine war, now nearing the one-year mark, has disrupted supply chains across the world, owing to which the prices of essential commodities such as fuel and food have increased globally. The war has caused shortages that have increased food insecurity due to the soaring food prices.
The US Bureau of Labour Statistics had shown overall inflation in the US at a staggering 6.5 per cent in 2022, with experts stating that the conflict raging in Ukraine was to blame.
Another reason for the rise in egg prices in the US is also consumer eating habits as well as local laws. For instance, in a state like California, egg prices are as high as $7 (Rs 572) for a dozen because a law mandates that all egg producers raise cage-free hens.
Additionally, eating habits in the US have changed. Between 2012 and 2021, egg consumption has risen 17 per cent, according to USDA report and even outpaced red meats.
Holiday highs
In addition to the avian flu and rise in inputs costs, a third factor that could be attributed to eggs becoming expensive is the holiday season. People buy more eggs around the holidays, when they’re baking and cooking more, and eating breakfast at home more often.
Restaurants and bakeries across the US have complained of the rise in egg prices. The Totem Family Diner in Washington’s Everett is scrambling to meet demand. “There’s a chance menu prices could go up, but right now, eatery owner Steve Jermyn said, “we’re trying to toe the line.”
Similarly, owners of Rickey J’s bakery in Birmingham, Alabama are also struggling owing to egg prices. “It has impacted us a lot because about 90 per cent of products have eggs in them. So it is a necessity, we have to buy them, but we are trying our best to not go up on the prices. We are trying not to go up on our prices because we value our customer and we want them to keep coming. But it is really hurting us,” said Rickey J’s Bakery President Janice Brown.
A grocery store in Cheverly, Maryland, posts a sign to apologise for the increased price of their eggs. AP
Some relief soon
However, the pain for egg lovers won’t last too long. As consumers wind down their holiday egg consumption, there will be more stock of eggs available.
As Moscogiuri pointed out that price pressures appear to be easing. This sentiment was also echoed by Jada Thomson, a University of Arkansas agricultural economist. She told Associated Press that relief would be coming in the next couple of months as egg farmers have been steadily replacing their flocks lost to bird flu last year.
“The market has now topped and spot prices are becoming increasingly negotiable,” Moscogiuri told CNBC. “As the spot price falls, the market will follow and we will likely see a 25 per cent-30 per cent correction from current all-time highs.
“This adjustment will likely take place over the next three weeks.” Any additional, large outbreaks of bird flu could disrupt this trend, he added.
With inputs from agencies
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