As some retailers experience low supply, egg prices have risen by almost 60%

The egg price was high in Thursday’s CPI report — rising 59.9% year-over-year and 11.1% month-over-month from November to December.

This was the largest monthly rise since April 2020, and the largest annual increase since September 1973, according Steve Reed, an economist at Bureau of Labor Statistics.

According to him, eggs alone caused December’s increase in groceries costs by 0.2%. “If you removed eggs, you can take eggs out of. [the ‘food at home’ category]It would have been nearly flat. He said that eggs were more than 90% of the increase. The cost per dozen of large grade A eggs was $4.25 as of December.

The reason for the sudden price rise? The avian influenza outbreak.

Yahoo Finance reported that the U.S. egg-laying fleet shrank by 10% after approximately 40 million hens were infected with the disease.

The result was a drop in total egg production of around 5%.

David Anderson, professor in the Department of Agricultural Economics at Texas A&M, said production expenses triggered record high prices, too.

“Feed prices have been much higher for the last couple of years. As feed prices climbed, profits fell. Therefore, the economic response is to produce fewer eggs laying chickens. [avian flu] He said “hitting”.

Anderson said that a small increase in the supply or production of eggs can lead to a larger price rise. This means that if the price rises, people will continue to buy eggs or not reduce their consumption. There’s no substitute for eggs in an egg McMuffin or omelette. It is a must to eat eggs.

He also said that holiday baking was a major reason for an increase in demand.

Retailers: What impact?

Due to supply issues, some retailers limit customers’ egg purchase.

Yahoo Finance noticed this sign in a BJ’s Wholesale Club on Nov. 29. It stated that customers could only purchase 2 cartons of eggs per month. BJ’s refused to comment on a request.

Brooklyn Whole Foods recently placed a similar restriction.

Other retailers are also reserving their rights.

A TargetTGTYahoo Finance spokeswoman for ) said: “While we are experiencing low inventories in some egg products but it ultimately depends upon the brand. We’re not restricting guest purchases at the moment.

Target’s private label 12 count currently has a 12.5% average sales price Good & Gather A conventional egg costs $4.26, which is one cent higher than the current U.S. average.

Yahoo Finance spoke with a Walmart spokesperson, saying: “While there are certain regions in the country that have seen some shortages, we are seeing an improvement in supply right now and have rebounded from a challenging holiday period which saw very high demand due to avian virus… There are no purchase limits for eggs.”

When will prices fall?

The Easter Holiday is just around the bend, so it might take some time before consumers start to see a reduction in egg prices.

Egg prices typically peak in spring, particularly table eggs due to Easter and Easter egg hunts. This boosts egg demand and prices. Anderson explained that this is happening very soon so egg prices will likely remain high in the coming months.”

Anderson is nevertheless optimistic.

“I do expect as we go further into 2023 that increases in production will begin to catch up to and surpass the disease losses so production will expand, we’ll get back to the 327 million or so egg layers and prices will come down,” Anderson said.

Bergquist of Wells Fargo also expressed confidence, saying that “we expect a slight fall between now-Easter, when prices are likely to spike again.” However, we don’t anticipate a retraction back to pre-bird flu levels. The outbreak will likely disappear over the next six month, and the flock of egg-laying birds will gradually rebuild, which will increase egg supply and help to reduce long-term egg prices. In summer, egg prices are typically lower than holiday seasons. This could happen again in 2023.

And per the USDAInventory is rising and prices are falling.

“In stock sizes increased and prices dropped in the last week 2022.” As the industry continues to rebuild its egg-laying flocks and moves beyond the holiday season, wholesale prices will likely decrease.

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Brooke DiPalma reports for Yahoo Finance. Follow Brooke DiPalma on Twitter @BrookeDiPalma or email her at [email protected].

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