Mention grocery prices to the average shopper, and you’re almost certain to hear one thing mentioned: eggs.
While the wholesale price of eggs has dropped slightly in recent weeks, according to the U.S. Department of Agriculture’s Agricultural Marketing Service, the cost of eggs had risen nearly 80% between January 2020 and January 2023. According to Todd Davis, chief economist at Indiana Farm Bureau, from 2021 to 2022, the increase was 60%, and 11% of that increase occurred in November to December 2022.
“When something hits supermarkets that fast, it’s very noticeable,” he said. Traditional holiday cooking and baking probably aggravated the effect, he added.
“Since January 2020, the cost of food at home has increased about 24% with eggs leading the way,” he said.
The primary cause of the increase is a highly contagious and devastating disease called Highly Pathogenic Avian Influenza (HPAI), which has decreased the size of the U.S. flock by 58 million birds – including 18.5 million fewer hens.
“That's a big number – we're down about 4.7%,” Davis said. That has in turn reduced the supply of eggs.
"In this case, it’s basic supply-and-demand fundamentals," Davis said. Also in short supply are the chicks needed to replace all those hens. And, Davis added, poultry farmers need to be careful when they do decide to rebuild their flocks.
“It’s a biological lag,” Davis said. “To control this, you have to depopulate, clean and let the facilities sit until it’s safe to reintroduce the layers. You have to let everything blow over, then when you believe it’s safe, you reintroduce chicks. And then you have to wait until they reach laying age.”
High energy and feed prices also are factors, he added.
The news is not all bad, he hastened to add. The U.S. Animal & Plant Health Inspection Service estimates that about 380,000 birds were affected by HPAI in January 2023, a sizeable decrease compared to December 2022, when the number was 5.07 million.
Indiana, which is the nation’s No. 2 producer of eggs, has so far been lucky, he added.
“Indiana has actually increased egg production by about 5%, so apparently some of the operations just were not affected by this disease, for whatever reason,” Davis said. “So the takeaway is when things blow over, Indiana will be poised to help with recovery.”