Why are egg prices so high and will they go down? Inside perfect storm behind skyrocketing costs
Here's what's driving egg prices and what to expect in 2023
- Egg prices jumped an astounding 49.1% from November 2021-2022.
- Those exorbitant prices are slowly leveling off as holiday demand declines.
- Avian flu, record-breaking demand and inflation created the perfect storm.
Cindy Keys, director of procurement for Snooze A.M. Eatery, remembers exactly how much a dozen eggs cost at the store right around the holidays: $8.57.
Keys, based in Colorado, has had egg prices on the brain. That's because Snooze, which closed out 2022 with 57 locations, purchased 8.3 million cage-free shell eggs last year.
Egg price hikes started in early 2022 as farmers began to reckon with highly pathogenic avian influenza. That flu, transmitted by migrating wild birds, has led to the loss of nearly 40 million hens, or at least a 5% decline in flock size, according to Department of Agriculture data. Egg production has averaged a 4% decline as a result.
"So as that continued to spread across multiple states in the U.S., we felt the pinch more and more," Keys said. "Every morning I would wake up and look at my email like, 'Oh no, who's raising their prices today?'"
The picture grew grim when the breakfast chain's primary supplier was hit, resulting in the elimination of 1.3 million hens.
"So at that point, we had to go to the open market," Keys said. "And I say this no pun intended, we were scrambling to source from multiple venues and avenues where we could get cage-free eggs."
Feeling the pinch at the store
On grocery store shelves, consumers watched egg costs climb 49.1% in November over the previous year, according to the Bureau of Labor Statistics' Consumer Price Index.
Prices often spike around Thanksgiving and Christmas but, even as holiday demand declines, egg prices remain stubbornly high.
Still, Department of Agriculture spokesperson Michelle Muth Person said food price increases are at least slowing, in part due to President Joe Biden’s economic plan. That includes eggs, which nevertheless remain at the center of their own perfect storm.
Though farmers have waged what American Egg Board CEO Emily Metz called a "valiant war" against avian flu, the cost of feed, fuel and packaging as well as supply chain issues continue to put pressure on prices.
"But eggs, even with prices moving around, remain among the most affordable proteins money can buy," she said.
Still, that's a double-edged sword that's driven consumer demand to all-time highs. Some markets have even seen shortages, with states that require eggs to be cage-free hit the worst, Metz said.
"But we are starting to see in overarching market conditions some glimmers of hope," Metz said. "I don't have my crystal ball, but we're starting the new year with signs from the federal level that inflation is going to ease."
At Snooze, Keys remains skeptical that help is on the way. Rising food prices and labor issues have been the top challenges to running a restaurant since the pandemic began.
The restaurant chain was slammed with egg costs upwards of 125% over their previous contract price agreements. Eggs represented the restaurant's single largest raw goods price increase in 2022.
"In 2022, our overall commodity inflation for the year was 16%, and eggs made up 3% of that 16%," she said.
As a result, the restaurant has had to raise menu prices several times. Keys could not say how many. For a restaurant where more than half of the menu contains eggs, price stability would be a godsend.
"I think the supply for '23 is going to remain tight only because when a barn is affected, it takes nine to 10 months for that farm to get back to where they were in supply because they have to euthanize all the hens, clean and sanitize the barns, and then they have to sit there for weeks with no contact."
After inspection, only then can the farmers reintroduce chicks, which take months to mature into egg layers.
"So it's definitely going to affect us through the majority of 2023," Keys said. "We're still seeing outbreaks, so who knows when it's going to stop."