Industry officials believe that egg inflation could continue for a while. The U.S. Department of Agriculture recently announced that egg production in the U.S. will be lower than expected next year. “Egg is still a relatively inexpensive source of animal protein and an easily replaceable food,” Bloomberg said. “Demand tends to be solid even if prices rise.” Rising U.S. egg prices
Egg prices, one of the world’s most popular ingredients, are showing no signs of falling due to accumulated supply disruptions. In October, McDonald’s sales in Australia were temporarily suspended, and egg stands were emptied at some U.S. marts, and egg prices are expected to reach a two-year high in the U.S. amid consumers’ inconvenience. The price of egg suppliers has soared, coupled with supply restrictions and increased demand. According to the U.S. Bureau of Labor Statistics on the 12th (local time), the price of a large A-grade egg (12 pieces) was $3.65 last month, up 8.3% from the previous month and 70.5% from a year ago ($2.14). Since November last year, the average retail price of eggs in the U.S. has risen 38%, and wholesale prices have soared 54.6% compared to the same month last year.
U.S. consumers have already felt tired from soaring egg prices. The price of a large A-grade egg peaked at $4.82 in January 2023, 2.5 times higher than the same period last year (1.93 dollars). Considering that the average annual egg price was around $1.4 in 2019, it has tripled in more than three years. Among various ingredients, the increase in eggs was overwhelmingly large. The annual inflation rate reached 60% in 2022. CNBC reported that the recent surge in egg prices is like a ‘deja vu’ phenomenon for grocery shoppers.
The main reason for the surge in egg prices is a decrease in supply caused by avian influenza (AI). Avian influenza, which spread to the United States at the end of 2021, is still prevalent. Avian influenza is fatal to the poultry industry due to its fast infection and transmission. According to the U.S. Centers for Disease Control and Prevention (CDC), about 33 million laying hens have been culled by avian influenza this year. In particular, half of them have been culled since October 15, and wholesale egg prices have soared 97% since mid-October. In terms of demand, seasonal factors are large. Demand temporarily increases during the year-end holiday season, which begins with Thanksgiving. Ryan Hosnovsky of Xpana, an agricultural market research company, explained, “The fourth quarter is the period when demand for eggs is strongest because consumers’ baking is increasing during the holidays such as Thanksgiving and Christmas.” Brian Moskoggiuri, vice president of egg distributor Eggen Limited, told CNBC, “It is very likely that egg prices will be close to record levels.”
According to a U.S. Department of Agriculture report released in 2019, Americans eat about 279 eggs per year. Egg suppliers are laughing at the surge in stock prices as popular food ingredients prices soar. Kalmain Foods, the largest U.S. egg supplier that produces 1 in 10 eggs supplied in the U.S., jumped 116.59% over the past year as of Wednesday. Vitalfarms, another egg supplier, soared 145.62% over the same period.
Industry officials believe that egg inflation could continue for a while. The U.S. Department of Agriculture recently announced that egg production in the U.S. will be lower than expected next year. “Egg is still a relatively inexpensive source of animal protein and an ingredient that cannot be easily replaced,” Bloomberg said. “Demand tends to be solid even if prices rise.”
EJ SONG
US ASIA JOURNAL
