The avian flu epidemic has driven chicken egg prices to record highs in the United States. The good news is that in recent weeks, wholesale egg prices have plummeted significantly, with experts predicting that this trend will eventually be reflected in consumer prices. However, it remains unclear how quickly and to what extent retail prices will decrease.
According to a report by CNBC, data from Expana, a financial news source tracking agricultural prices, shows that wholesale egg prices dropped to $4.83 per dozen last Friday (March 14), a 44% decrease from the peak of $8.58 per dozen on February 28.
A market analysis report released by the U.S. Department of Agriculture last Friday highlighted potential reasons for the decline in egg prices, including a partial easing of the major avian flu epidemic in March, rapid improvements in egg supply, and a slowdown in consumer demand.
Karyn Rispoli, a market analyst at Expana, told CNBC that wholesale prices have experienced a “significant drop.” She mentioned that the high prices and purchase restrictions implemented by many grocery stores have deterred consumers, leading to a reduction in egg purchases and helping alleviate supply shortages.
Data from the U.S. Bureau of Labor Statistics shows that in February, the average retail price for a dozen Grade A large eggs was $5.90, setting a new historical high far above the previous record of $4.82 in January 2023, nearly doubling from a year ago.
While wholesale egg prices have dropped significantly, the impact has not yet reached the store shelves. Experts suggest that it remains uncertain how quickly consumers will feel the price relief and to what extent retail egg prices will decrease.
Rispoli explained that there is usually a lag of two to three weeks between changes in wholesale costs and subsequent retail pricing, meaning consumers are still largely feeling the effects of the peak market prices when purchasing eggs now.
A substantial drop in wholesale prices does not necessarily translate to an equivalent drop in retail prices. Rispoli stated that it ultimately depends on retailers to decide to what extent they will follow wholesale price changes.
Kevin Bergquist, a chicken egg analyst at the Wells Fargo Agri-Food Institute, mentioned that with the approaching Easter holiday on April 20 this year, egg demand may remain high.
In a market update report for March, Bergquist wrote, “Egg prices may experience high volatility in the near term, but they are likely to stay elevated. We may see egg prices continuing to remain high in the short term.”
The avian flu epidemic in the U.S. has led to over 100 million egg-laying hens being culled. This has not only driven up egg prices but also caused a strain on egg supply. The U.S. Bureau of Labor Statistics’ inflation report for February, released on March 12, indicated a 0.2% month-on-month increase in food prices and a 2.6% year-on-year increase, with egg prices being a major driver. Egg costs surged 10.4% month-on-month in February, marking a 58.8% increase compared to the previous year.
Turkey announced in February that it has begun exporting around 15,000 tons of eggs to the U.S. As part of a $1 billion action plan to combat avian flu, U.S. Agriculture Secretary Brooke Rollins announced plans to seek egg imports.
The Department of Agriculture introduced five measures in late February aimed at reducing the additional expenses people are facing due to rising food prices. The plan involves short-term imports, regulatory relaxations, investments in biosecurity, reintroducing poultry, as well as investing in vaccine and treatment research.