Egg prices rise due to ongoing avian flu outbreak

The cost of eggs, a kitchen essential, has risen again, putting this staple food in the spotlight as consumers and analysts alike express concern about inflation and absolute price levels.

Egg prices saw their third consecutive month of year-over-year increases in July, in sharp contrast to the previous year’s declining price trends. The primary reason for this upward movement is the continued prevalence of Highly Pathogenic Avian Influenza (HPAI), commonly known as bird flu.

According to the latest Consumer Price Index (CPI) data, egg prices jumped 19.1% in July compared to the same month last year. This increase contrasts sharply with the overall CPI basket, which increased only 2.9% in the same time frame.

The pandemic period has highlighted egg price inflation as a significant concern for consumers due to the widespread use of eggs in daily meals. The rising costs of eggs and other staple foods have been a major cause for concern, negatively impacting consumer sentiment in recent years.

The most recent spike in egg prices, however, more closely aligns with a nearly 8% increase from March to April, potentially tied to seasonal trends in avian influenza cases. This represents the largest month-over-month increase since spring 2023.

Caitlinn Hubbell, a market research analyst at Purdue University’s Center for Food Demand Analysis and Sustainability, attributes the persistent price increases to avian influenza. “Unfortunately, the ongoing circulation of high-pathway avian influenza has continued,” Hubbell said.

The virus had a significant outbreak in 2022 and has shown a resurgence since late 2023, with notable increases in Colorado and California impacting egg supplies.

Hubbell points out that demand for eggs remains “inelastic,” meaning that price increases do not generally discourage consumers from buying their usual quantities. Conversely, price decreases do not encourage stockpiling.

This inelasticity leads to significant price volatility even with small supply disruptions, which is evident in the current market conditions where egg prices have skyrocketed. In July, the price for a dozen large Grade A eggs topped $3, marking a remarkable high not seen in over a year.

Although prices have recently accelerated, they are still 20% lower than the previous year’s figures. However, within the CPI basket, egg prices have increased by about 42% since July 2021.

Looking ahead, Hubbell remains cautiously optimistic about future price trends, which are largely dependent on the trajectory of avian influenza. “The outcome will depend on the magnitude and impact of HPAI,” he concluded, hoping for potential relief in the less epidemic-prone seasons ahead.