2024-08-17 12:45:26
Luke Sharrett/Bloomberg via Getty Images
Rising egg prices have put the household staple back in the spotlight as consumers worry not only about inflation but also about the absolute level of prices.
July marked the third consecutive month of year-on-year increases in egg prices, reversing a relative decline the previous year. The culprit is the ongoing fight against highly pathogenic avian influenza (HPAI or bird flu).
According to consumer price index (CPI) data released this week, the price of this important food ingredient surged 19.1% in July compared with the same period last year. In contrast, the entire CPI basket of goods rose only 2.9% during the same period.
Due to their ubiquity in everyday cooking, rising egg prices have become a focus of consumers during the pandemic. Rising prices for eggs and other food products have been a top concern for consumers, who are struggling to cope with rising costs, which in turn has hurt consumer confidence in recent years.
But the latest wave of inflation appears to be more related to the nearly 8% increase from March to April, which may be related to the seasonal pattern of bird flu. This was the largest month-on-month increase since the spring of 2023.
“We think, in short, this is about avian influenza,” said Caitlinn Hubbell, a market research analyst at the Center for Food Demand Analysis and Sustainability at Purdue University in West Lafayette, Ind. “Unfortunately, highly pathogenic avian influenza is here to stay.”
Avian flu outbreaks occurred in 2022 and surged again in late 2023. Recently, Hubbell said recurrences in Colorado and California have affected supply.
Hubbell said demand for eggs is considered “inelastic,” meaning consumers will generally buy the same amount regardless of price increases. On the other hand, she noted, consumers generally don’t stock up when prices are lower.
Inelastic goods are susceptible to large changes in price in response to even small changes in supply, she said, highlighting the impact an outbreak of avian flu could have on the prices consumers see on grocery store shelves.
For consumers, that has led to higher prices: The average price of a dozen large Grade A eggs in July exceeded $3 for the first time in more than a year, according to the U.S. Food and Drug Administration. Bureau of Labor Statistics.
Although prices have accelerated again, they are still more than 20% lower than last year. However, compared with July 2021, the price of eggs tracked in the CPI basket has increased by about 42%.
Looking ahead, Hubbell said price trends will depend on the status of avian influenza. But she hopes consumers will feel some relief that an outbreak is unlikely in the upcoming season.
“It’s hard to say,” Hubbell said. “It all depends on the size and scope of the HPAI outbreak.”
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