Egg prices are back on the rise as a devastating bird flu outbreak and swelling consumer demand eats into supply.
Wholesale egg prices surpassed about $3 per dozen in August, according to the U.S. Department of Agriculture, up from the usual $1 to $2 range. Retail egg prices were up 19% in August compared to last year, according to the latest Consumer Price Index data, while the broader grocery category increased only 1%.
highly pathogenic avian influenza, or bird flu, has forced egg supplies to be “less robust than normal.” At the same time, U.S. sales have jumped to levels not seen since the pandemic.
Despite the price fluctuations, consumers continue to buy eggs — and more of them, as of the last few months. August egg sales were up more than 5% compared to 2023, and producers sold 237 million eggs in the most recent four-week period. “We haven’t seen that number since the first year of COVID,” he said, when sales soared as consumers stocked up on staples including eggs and toilet paper.
As domestic demand stays strong, other countries are also buying more U.S. eggs. According to the U.S. Egg Export Council, total exports for the first four months of the year increased by 22% to 63.5 million dozen eggs, though values were down 22%.
Demand is expected to rise further during the fall and winter months with the holiday baking season entering full swing. That could further pressure the commercial egg supply, especially as bird flu also spreads more easily in colder climates.
Ok good, then we agree they’re seeing record profits and should not be raising prices.
No. Because I have a basic understanding of economics and business operations, it depends.
If you could show me the revenue, profits, sales, investments, and salaries for a company and put their finances in context with the entire industry and external factors, then I could form some opinion about that company or the industry as a whole.
Egg producers on the west coast had to slaughter over four million hens due to bird flu. Taking this single event as it is, it would suggest that the wholesale cost of eggs on the west coast would decrease while the east coast would see prices increase. Because the overall supply of eggs decreased and, as its been reported, the demand has increased, retail prices went up. This price increase is due to the need to acquire eggs from other locations and juggling the supply chain. When dealing with unknown economic forecasts, due to bird flu or hurricanes or forrest fires or covid, an intelligent CFO would increase prices to prepare for a downturn in sales. Then, when they have too much stock, they could sell the product cheaper to get rid of it. If it turns out that there’s a sustained economic stress, they’ve banked some cash to continue operations - employing staff. They might even hoard capital to make investments. These investments could be for needless CEO bonuses, they could be for union pensions, they could be for expanding infrastructure, or buying other failing companies.
“Record profits”, in and of itself, is not a bad thing. How they acquired those profits and what they do with them is what’s to be judged.