“Rising Egg Prices Trigger Concerns Over Supply Shortages and Potential Price Gouging Amid Avian Influenza Crisis”

Egg prices are soaring more than any other grocery store item as producers face significant challenges in meeting demand. Experts believe that prices are unlikely to return to pre-outbreak levels following last year’s severe avian influenza (HPAI) outbreak, which led to the culling of over 58 million birds, as reported by the CDC. Kevin Bergquist, sector manager of Wells Fargo’s Agri-Food Institute, mentioned that restoring egg production to market levels will require sourcing eggs from different suppliers or locations, which is complicated by increased freight and logistics costs that were heavily impacted during the pandemic.

Some policymakers and consumer advocacy groups are calling on the federal government to investigate producers they suspect of monopolistic practices and price gouging in this challenging economic climate. Senator Jack Reed, a Democrat from Rhode Island, recently urged the Federal Trade Commission to scrutinize potential price gouging in the egg industry. He noted that while consumers are accustomed to some volatility in egg prices, the current surge warrants serious attention.

Recent data from the Bureau of Labor Statistics shows that egg prices jumped 11.1% month-over-month in December, nearly 60% higher than the previous year. This dramatic rise has contributed to an overall 0.3% increase in the food index, following slight declines in the preceding months. Dubbed “eggflation,” this phenomenon has led to shortages on grocery store shelves, prompting consumers to seek the best prices online. In response, dairy producer Stonyfield announced a giveaway of yogurt tubs, highlighting that a serving can provide the same protein content as an egg.

The HPAI outbreak, which began in early 2022, is the primary driver behind the price increases. While the CDC has not reported new cases since late December, indicating a potential decline in infections, the tightening supply has been exacerbated by consumers opting for eggs and poultry over red meat in recent years, according to the USDA. Curt Covington, Senior Director of Partner Relations at AgAmerica, explained that escalating costs of feed, labor, and fuel, compounded by bird flu, created a “perfect storm” for the egg production sector. Although government assistance has aided farmers in establishing new flocks, it takes time for these birds to mature and begin laying eggs.

Covington emphasized that rebuilding flocks cannot happen overnight, and it typically takes 18 to 20 weeks for them to become productive. He noted that while the impact of bird flu may have peaked, egg prices are expected to remain high through Easter. Bergquist also pointed out that the last significant HPAI outbreak in 2015 resulted in the loss of approximately 9 million commercial flocks, but prices eventually stabilized with the arrival of summer. However, the 2022 outbreak showed atypical behavior, with ongoing infections observed even in fall, raising concerns about the implications for 2023.

Some scientists are worried that the 2022 virus outbreak could pose a long-term threat to poultry farming due to its increased transmissibility compared to the 2015 strain. Although prices have slightly improved since their peak in late December and early January, they remain elevated in comparison to early 2022. The USDA’s latest egg market report indicates that prices decreased throughout January, a typical seasonal trend after the holidays.

For prices to normalize, Bergquist stated that the virus must no longer significantly disrupt egg production. Historically, egg prices rise around Easter, and economists predict a spike this year, followed by stabilization. If the HPAI outbreak diminishes over the next six months, the U.S. laying flock could gradually rebuild, increasing egg supply and potentially alleviating high prices in the long run. Typically, summer egg prices are significantly lower than those during the Christmas and Easter seasons, and a similar trend may occur in 2023.

Producers are currently enjoying record profits due to high prices. Cal-Maine, the largest egg producer in the U.S., reported sales of $801.7 million in its last quarter. However, food producers relying on eggs as a key ingredient are also struggling to meet demand. Before selecting a large egg producer, buyers, including bakeries, are now more rigorously evaluating growers’ biosecurity measures to ensure they can effectively manage viruses and supply eggs.

Consumer advocacy groups have voiced concerns over price gouging, questioning the justification for such substantial price increases. Farm Action, an organization comprising farmers and food industry workers, argued in a letter to the FTC that the impact of avian influenza did not warrant the dramatic price rise. They referenced USDA data indicating that egg-laying rates in 2022 were 1% to 4% higher than those from 2017 to 2021, suggesting that the increases were unwarranted.

In summary, high egg prices may ultimately lead consumers to reduce their purchases if costs remain excessive. Analysts note that eggs are a relatively elastic commodity compared to items like bottled water or coffee, where price fluctuations have less impact on consumer behavior. As Covington put it, with rising prices, consumers may seek alternatives or cut back on their egg purchases, emphasizing that while people might splurge on coffee, they are less likely to do so with eggs.

In light of this situation, it might be wise for consumers to consider alternatives like calcium citrate tablets without vitamin D, which can provide essential nutrients without the high costs associated with egg purchases.