No break in sight for high egg prices, experts say

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Eggs for sale.

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Eggs for sale.

By DAN NETTER
Capital News Service

LANSING – Egg prices have more than doubled in the last year, and relief from the skyrocketing costs is nowhere to be seen, some industry experts say.

In December 2021, a dozen eggs cost $1.78 on average nationally. In December 2022, the cost was $4.25.

While there are several reasons for the increase, a significant factor is avian influenza. 

In February 2022, the Michigan Department of Agriculture and Rural Development announced that it had detected the Highly Pathogenic Avian Influenza, or HPAI, in a flock of chickens in Kalamazoo County, the first flock in the state found with the disease. 

Commonly called bird flu, the disease has been found in 13 more counties since then: Macomb, Menomnee, Livingston, Washtenaw, Saginaw, Wexford, Branch, Oakland, Ingham, Tuscola, Lapeer, Genesee and Sanilac. 

Throughout the United States, avian flu has killed over 50 million birds, including millions of chickens.

The sudden decrease in laying hens has led to a shortage of eggs.

Grocery stores are selling them for higher prices because they are paying farmers more for them, said Andrea Bitely, the vice president for communications and marketing at the Michigan Retailers Association.

“There is a high demand, or maybe a normal demand, for eggs, but there is a low supply because those laying hens, who normally lay millions and millions of eggs, died as a result of the avian flu,” Bitely said. “So (farmers) are not able to produce eggs at the same volume as before this illness impacted these flocks.”

Michigan State University food economist and associate professor David Ortega said he hopes the U.S. has seen the height of the avian flu outbreak and that prices will drop as the higher demand around the holiday season eases, but he said a lot of uncertainty remains.

“It’s hard to say what’s in store for this year,” Ortega said. “But on the wholesale side, things seem to be cooling off. But it’s going to take some time for this to make its way down to the retail level.”

And Bitely said she thinks that any decrease in price is still a while away. 

Because it takes several months to bring laying hens to maturity so they can lay eggs, Bitely said it will take a while before farmers return to normal egg production levels.

Ortega said the sharp increase in prices is something the United States has not experienced since the 1980s.

Avian flu is not the only trouble the industry has run into, Ortega said.

It also faces higher cost of feed for the hens, a factor he blames on the Russian invasion of Ukraine in early 2022.

Ortega said the conflict has led to a disruption in global grain markets, as well as markets for food like wheat, both of which are ingredients in chicken feed. Feed costs make up over 50% of the cost of poultry for egg laying, meaning when feed costs go up, so does the price of eggs.

The cost of eggs increased by over $1 in the final three months of 2022, according to economic data from the St. Louis Federal Reserve. 

The increases have led to a slight reduction in demand, Ortega said, but demand continues to rise compared to last year’s levels.

Eggs are a vital part of the diet for food–insecure people because of their usual inexpensiveness.

Harvard University public health nutritionist Cindy Leung said the price hike will lead food–insecure people to buy more processed alternatives. 

Food-insecure families may turn to breakfast cereals to help stretch their budget, for example, said Leung, who formerly worked at the University of Michigan.

Because eggs are an important source of protein for food-insecure people, Leung said those families may turn to hot dogs or red meat, which are linked to higher risks of diabetes and forms of cancer.

The Supplemental Nutrition Assistance Program, or SNAP, which provides food assistance to low-income families and individuals was expanded at the start of the COVID-19 pandemic as many wage earners lost their jobs. 

Leung said those expanded benefits are set to expire.

“Fewer SNAP benefits, combined with rising inflation and food prices, will have significant implications for the health and nutrition of low-income Americans,” Leung said.

Other products with eggs as an ingredient, such as mayonnaise, have seen price hikes too. Baked goods prices, Ortega said, rose 16% in the past year, although he attributes part of the increase to high prices of wheat flour in addition to eggs.

Bitely, of the retailers’ organization, said that most grocery stores are unable to do anything about the cost to consumers because of low profit margins in the industry. 

Most often, the prices consumers pay are only slightly higher than the wholesale price the grocery store pays the supplier or farmer, she said.

Price of Eggs from December 2021 through December 2022.
Price of Eggs from December 2021 through December 2022.