Familiar Phenomenon
Inflation has cooled substantially in recent months to the great relief of many Americans. But while the pace of price increases has slowed overall, inflation is picking up for certain things.
That’s right: Eggflation is back.
What’s Causing Eggflation?
A quick reminder, we’ve been here before: Many costs soared during the pandemic, including food items, but the price of eggs was a special case. The average price per dozen of Grade A eggs surged from less than $1.50 in January 2021 to nearly $5.00 in January 2023, per U.S. Bureau of Labor Statistics (BLS) data. That’s a price increase of more than 200%.
Then, last month’s consumer price index showed a number that was reminiscent of the pandemic era eggflation: Egg prices rose more than 28% year-over-year in August, by far the biggest climb of any individual food item.
So what happened? This outsized price move is in large part connected to an ongoing bird flu outbreak. The virus has been detected in more than 100 million birds across the continental U.S. since January 2022, per data from Centers for Disease Control and Prevention. And egg production fell 2.6% annually in July, per Department of Agriculture data cited by CNN. At that point, it boils down to a basic economic principle: There’s more demand than supply, so prices go up.
Egg-xtra Factors
It’s unsure when eggflation will come down. But it’s also unlikely that we’ll see a price hike like we did during the pandemic, when a lot of different factors weighed on wholesale prices.
That said, the egg industry remains heavily consolidated, which is unlikely to help get prices down. As of 2020, five companies controlled more than a third (36% to 40%) of egg production in the U.S., according to a Farm Action report.
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