Consumers’ concerns are rising as egg prices continue to climb, bringing the household staple back into the spotlight. This is due to worries about both inflation and the overall cost of eggs.
In July, egg prices experienced a consecutive third-month increase compared to the previous year. This marks a reversal from a year of consistent price decreases. The main factor behind this rise is the ongoing fight against the highly pathogenic avian influenza, commonly referred to as HPAI or the bird flu.
In July, the prices of the essential food ingredient witnessed a significant surge of 19.1% compared to the same month in the previous year, as per the recently released consumer price index (CPI) data. In contrast, the overall CPI basket experienced a much lower increase of just 2.9% during the same period.
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During the pandemic, consumers have become increasingly concerned about the rising prices of eggs, which are a staple in everyday cooking. The surge in egg prices, along with other grocery items, has been a major cause of worry for consumers, leading to a decline in consumer sentiment in recent years.
The recent surge in inflation seems to be linked to a significant jump of almost 8% between March and April. This increase can be attributed to seasonal patterns in the bird flu. It marks the largest month-over-month rise since the spring of 2023.
Caitlinn Hubbell, a market research analyst at Purdue University’s Center for Food Demand Analysis and Sustainability in West Lafayette, Indiana, believes that the reason for this increase in demand for poultry products is closely related to avian influenza. She states, “The short answer, we think, is related to avian influenza. As unfortunate as that is, the high-path avian influenza has continued to be around.”
In 2022, there was a significant outbreak of bird flu, which resurfaced again towards the end of 2023. Currently, there have been reported resurgences of the virus in Colorado and California, causing a strain on supplies, according to Hubbell.
Egg demand is often referred to as “inelastic,” according to Hubbell. This means that consumers tend to purchase the same amount of eggs regardless of price increases. However, Hubbell also pointed out that consumers typically don’t take advantage of lower prices by stocking up on eggs.
According to the expert, small changes in supply can lead to significant price fluctuations for inelastic items. This means that any bird flu outbreaks can have a noticeable impact on the prices customers encounter when shopping for groceries.
Shoppers have been experiencing an increase in prices, which has been particularly evident in the cost of eggs. In fact, the average price for a dozen large, Grade A eggs exceeded $3 in July, marking the first time in over a year, as reported by the Bureau of Labor Statistics.
Prices have rebounded, but they are still more than 20% lower than last year. However, the cost of eggs included in the CPI basket has increased by approximately 42% since July 2021.
According to Hubbell, the future price movements will depend on the status of the bird flu. However, she remains optimistic that consumers may find some relief in the upcoming seasons, as they are less likely to experience outbreaks.
“It’s difficult to determine,” Hubbell remarked, contemplating the potential ramifications of HPAI. “The outcome will heavily rely on the magnitude and extent of the HPAI.”
