Why Are Eggs So Expensive?

The bird flu isn’t the only factor driving up prices of the kitchen staple: A Dispatch Eggsplainer.

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A note apologizing to customers for egg price increases in a New York grocery store. (Photo by Fatih Aktas/Anadolu Agency via Getty Images)

Paying $7 for a dozen eggs pushed JoJo Dodd over the edge. The 30-year-old Californian recently bought three hens on Craigslist. Sharing a cramped backyard with Dodd’s dog, the trio of chickens now produce about an egg a day each, saving Dodd some $50 per month, minus the cost of feed.

In December 2021, consumers paid an average of $1.78 for a dozen eggs. A year later, the average price reached $4.25—a whopping 138 percent increase from the year prior, according to the Bureau of Labor Statistics. In some parts of the country, 12 eggs cost as much as $9.73, according to grocery delivery company Instacart. 

What’s behind the sticker shock?

The bird flu

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  1. Mary Stine

    Not mentioned here, but hen chickens are sensitive creatures, who react badly to drastic temperature changes, just like humans. Who thinks all those chicken houses were exempt from weather events that cut off electricity for air conditioning and heating? Hens don't produce eggs well, or at all, when the weather is wacky.
    and speaking from my time as the chicken keeper on the farm where I grew up: chickens are stressed by another chicken's injury or illness and will even peck that chicken to death.

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    Leslieannwarner

    On my farm in the Midwest, it costs about $0.12 a day to feed a chicken, and ten minutes a day to care for my small flock. The California chicken farmer is saving $50 a month on eggs, but spending at least $11 on feed. She's also not accounting for any of her labor ($77.50 a month if she pays herself the CA minimum wage), let alone the costs of the coop, lighting, feeders/waterer, replacement hens, etc. etc. Eggs are still pretty darn cheap!

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  3. Milmarkst

    Too bad Dick Nixon wasn’t here. He could put a cap on the price of eggs and the we could wait in a half mile long line to get a four egg quota!

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    PC Albright

    One irritating thing you see often is that "record profits" are phrased in terms of dollar amounts rather than percent of revenue. If for example the price goes up 50% then of the margin is held constant (which it normally would be) then profit dollars go up 50%.

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    BrettH

    Nice job, thanks Harvest.

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    Azlefty

    When your rivals can't produce, you can raise prices. That's market power and it's non-competitive behavior, but it's short-run market power and won't last once your rivals can breed more chickens and return to the market. That isn't illegal.

    If in the meantime your rivals become so weak and desperate for cash that they all sell their productive assets to you, you have monopolized the market, which may be another story.

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    Brian L.

    Am I the only one who thinks it’s sad that an “agricultural economist” has to drop an f-bomb in his assessment of the egg industry? Sheesh.

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      Ben Connelly

      Yeah it’s sad he can’t be more professional in his language choices.

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      Azlefty

      As a recovering non-agricultural economist, I think it's great and I wish more of us would.

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    Ben Connelly

    Great explainer. The only thing I’d add is that price gouging is a feature, not a bug. I can’t believe price gouging is actually something that people go to court over. I want companies to price gouge when there is a shortage. It’s called supply and demand.

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    1. DTruitt

      Pretty sure these morons shouting "price gouging!" weren't shouting "excessive give-aways!" when the same company recorded a loss the year before. Morons don't realize that every business endeavor involves both risk and reward (or profit). The story of agriculture itself has always been the story of fat years and lean years.

      Any business that cannot make a profit for very long, unless it has extremely forgiving investors, cannot remain in business very long. There are often times a cycle of good years and bad years particularly when it comes to commodities, which all agricultural products are. Ditto with oil and gas, metals, memory chips, etc.

      When oil and gas prices jumped in 2022, it seems that most people (or at least most Democrats) forgot that just two years prior, oil and gas prices cratered during the initial stages of the COVID pandemic due to vastly reduced driving worldwide ... to the point that in April 2020 crude oil spot prices actually went negative for a few days ... meaning the sellers of oil were paying buyers to haul it away!

      Any law written by humans can be repealed, changed, or ignored ... but the law of supply and demand can never be repealed or ignored. Because that is how humans always behave - it's our nature.

      This is a good subject for KDW to address with his series of economics for dummies.

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        Ben Connelly

        KDW should

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      Jason

      Every time I see "price-gouging" I want to gouge my eyes out. The company may have made an enormous profit in one quarter but, to quote KDW, the response to that should be: Compared to what? Well, that loss from the same quarter in the previous year. It's a pretty big swing, but given the avian flu (and what happened to egg prices in 2015-17*), it's not surprising.

      Same thing can be said of the oil companies. Record profits, yes - after record, almost incomprehensibly large losses. Exxon's swing from -$22.4 billion in 2020 to +$23 billion in 2021 is mind-boggling.

      Anyway. The phrase is triggering.

      *George Calhoun at Forbes, writing about U.S. CPI gets into the egg numbers: https://tinyurl.com/svcz9f5b

      "Indeed, we can predict with some confidence what comes next: an egg glut, and a price collapse. It can be predicted because it has happened before. The previous “worst ever” outbreak of avian flu in 2015 was followed by a painful (for producers) oversupply crisis two years later, as the Wall Street Journal headlined “Cheap Eggs Flood U.S Grocery Stores.

      Egg prices are near a decade low [in 2017], spurring losses for industry giants and farmers alike.”

      Give it a couple of years. Soon enough we'll be inundated with stories about the need for more farm subsidies.

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        Ben Connelly

        Oh exactly! Everybody gets worked up about what the price is today and doesn’t think about what it was yesterday and what it will be tomorrow. People are something they don’t like, assume it’s a problem - rather than a circumstance of the world that will resolve itself - and scream for somebody to do something.

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        1. GenZConservative

          Calvin Coolidge said (paraphrased) "If we see ten problems rolling down the road towards us, nine will roll into a ditch before they get here. Too many problems are caused by men who refuse to wait and see"

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            Ben Connelly

            One of Coolidge’s best quotations

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          Anne W (Raw5254)

          I’ll admit that the price of eggs has been shocking. But, I can understand why it’s happened, and I figure eventually it will go back down. The cost of groceries, in general, is higher, and the people I feel sorry for are the ones feeding teenagers!

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      Manleys

      Exactly!

      I live in Florida and Floridians 1) largely support anti-price-gouging laws and 2) complain bitterly when the gas stations run out of gas before a hurricane.

      Can't have it both ways, people!

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        Ben Connelly

        I think people think that the way that it works is that businesses just have money and the products they deliver and they don’t understand where the money comes from (or the products for that matter). So a price increase feels “unfair,” because they don’t understand the reason why it increased and humans often find things unfair when we don’t understand the explanation. It doesn’t help that some people think there’s something inherently wrong about profit, so that only adds to the feeling of unfairness.

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    Seth

    Harvest, I know you like to offer folks an egg in a trying time. But what do you do when the trying time is eggs?! Offer a hen?

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  10. MathewA

    We were already planning this. But should start raising chickens within the month. Will be starting with a 100, and going from there (we're on 20 acres, and just got some Jersey cows too).

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