See What’s Behind Surging Egg Prices

Person pointing at an upward trend line graph.

Egg prices are set to soar by another 20% before year’s end, driven by an ongoing avian influenza crisis and new cage-free production laws.

Key Takeaways

Egg prices have risen nearly 37% in one year, with the average cost for a dozen Grade A large eggs increasing from $3.65 to $4.15 in December 2023.
The Highly Pathogenic Avian Influenza (HPAI) has resulted in the culling of millions of egg-laying hens, causing a significant supply reduction.
New cage-free production laws in states like Michigan are contributing to increased costs and supply chain disruptions.
Experts warn that egg prices will remain volatile until flocks are rebuilt and production levels recover.
The transition to cage-free environments is adding complexity to an already strained market, potentially leading to shortages and higher prices in affected areas.

The Perfect Storm: Avian Flu and Cage-Free Laws

The American egg industry is facing unprecedented challenges as it grapples with a devastating avian influenza outbreak and the implementation of new cage-free egg production laws. These factors have combined to create a perfect storm, driving egg prices to record highs and leaving consumers scrambling to find affordable options.

Highly Pathogenic Avian Influenza (HPAI) has wreaked havoc on poultry farms across the nation. Since January 2022, the virus has affected more than 134 million birds in the U.S., with over 102.6 million egg-laying hens culled to prevent further spread. This massive reduction in the laying hen population has led to severe supply shortages and subsequent price hikes.

The Cage-Free Conundrum

Compounding the avian flu crisis is the implementation of cage-free egg production laws in several states. Michigan, for example, recently enacted a law banning non-cage-free eggs, joining seven other states with similar regulations. This shift towards cage-free environments, while well-intentioned, has added another layer of complexity to an already strained market.

“I know that there have been some sourcing issues resulting in less than fully stocked grocery shelves here today,” said Tim Boring, director of the Michigan Department of Agriculture and Rural Development.

The transition to cage-free production systems requires significant investments from farmers, ultimately leading to higher production costs. These costs are inevitably passed on to consumers, who are already grappling with inflated egg prices due to the avian flu outbreak. In Michigan, for instance, egg prices have surged, with some stores reporting prices as high as $4.99 for a dozen eggs.

The Impact on Consumers and Retailers

The combined effects of the avian flu outbreak and cage-free laws are being felt acutely by both consumers and retailers. Shoppers across the country are facing sticker shock at the grocery store, with egg prices rising far more rapidly than overall food inflation. According to the U.S. Bureau of Labor Statistics, egg prices have increased by nearly 37% in just one year, compared to a 2.5% rise in overall food prices.

Retailers are also struggling to keep up with the volatile market conditions. Many stores have been forced to adjust their pricing strategies to avoid selling out completely, while others are grappling with empty shelves due to supply shortages. The situation is particularly dire in states with cage-free egg laws, where retailers may face additional challenges in sourcing compliant products.

Looking Ahead: A Persistent Problem

Unfortunately, experts warn that relief may not be coming anytime soon. The avian flu outbreak continues to pose a significant threat to poultry flocks, with no vaccine or medical treatment currently available. Biosecurity measures remain the only defense against the highly contagious virus, which can persist in bird waste for months.

The road to recovery for the egg industry will be long and challenging. With it taking approximately five months for a chicken to mature and begin laying eggs, rebuilding flocks and restoring production levels will be a time-consuming process. As a result, consumers can expect egg prices to remain volatile and potentially increase by another 20% before the year’s end.