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Why are eggs so expensive again and when will prices drop?

Egg prices are expected to rise significantly next week. What is driving the price increases?

Egg prices are expected to rise significantly next week. What is driving the price increases?

Though egg prices are down 17 percent compared to this time last year, they are once again rising rapidly. According to the Bureau of Labor Statistics’ Consumer Price Index, prices have shot up 9.3 percent since December.

On Monday, March 18, the US Department of Agriculture (USDA) released the weekly Egg Market News Report, which found that New York state was seeing an increase in prices. “Price for New York eggs are up 6 cents for Extra Large and Large and 7 cents higher for Medium,” reads the report. California saw some of the most dramatic price increases last year, but currently, the market is stable. On Friday, the USDA released a lighter report noting that while “California and regional prices are steady,” analysts saw that “asking prices for next week’s deliveries are trending higher on all sizes.” The USDA is warning that prices in the Golden State are rising faster than many other states, with “next week’s asking prices are 16 cents higher for Jumbo and Extra Large, 19 cents higher for Large, 10 cents higher for Medium and Small.”

Playing around with different ZIP codes, we find that a wide range of prices are offered for a dozen eggs. For instance, Safeway charges $5.99 for twelve eggs in San Fransisco. Meanwhile, the same product is offered for $4.29 up in Chico, California. There may be slight price differences based on transportation and logistics, but knowing how much of the difference is related to that and how much the company is setting the price as high as they think consumers will pay is a real challenge.

What is causing prices to spike?

A year ago, More Perfect Union investigated the cause of ‘egg-flation’ and found that the rapid increases in prices that were sometimes later followed by sudden drops in prices had two main causes: a massive wave of the deadly avian flu and corporate greed. The flu became a pretext under which egg prices could be increased, blaming short supply, but the news organization found that prices had risen far above what one would expect. The reporting looked at Cal-Maine as their case study because the company is the largest distributor of eggs in the country.

The company claimed that the bird flu was leading them to increase prices. The company’s December 2022 financial report reported that “reduced supply related to the outbreak in the U.S. of highly pathogenic avian influenza” led to price increases. However, upon closer reading of the report, the company also said that its facilities had not experienced any outbreaks.

As Easter approaches, the demand for eggs rises. However, the country’s egg production is in an improved position this year, with more eggs being laid than in March 2023. This increase should allow prices to soften. Whether or not that happens will be known in early April, when the BLS releases the March CPI report.