Egg prices will continue to soar in 2023 here’s why

A year in which Americans saw their bills balloon across the grocery store was marked by a surge in egg prices.
The average price of eggs jumped 49.1% in November compared to the previous year—the largest annual percentage increase of all grocery items in that period, according to the consumer price index, which is a barometer of inflation.
In comparison, the “food at home” category was up 12%.
According to data from the Federal Reserve Bank of St. Louis, the increase is even more acute when measured by the cost of a dozen large, Grade A eggs, which more than doubled to $3.59 in this November from $1.72 in November 2021.
The economists say that the price dynamics are mostly because of the deadliest outbreak of bird flu in U.S. history. This outbreak has killed millions of egg-laying hens this year.
“Many things have changed since 2020,” said Bill Lapp, president of Advanced Economic Solutions, a consulting firm specializing in food economics. The recent spike in the shell-egg and egg-product markets is extraordinary.
As of Dec. 28, the U.S. Department of Agriculture reports that 57.8 million birds have been impacted by avian flu. Birds such as turkeys and ducks are included in these figures, too.
Relative to other countries, bird flu is rare in the U.S. The last bout was in 2015, when 50.5 million birds were impacted, according to the Centers for Disease Control and Prevention.
Lapp said the flu hadn’t emerged in at least a decade or two prior to that.
The New Jersey Department of Agriculture said in October that avian flu is “highly contagious.” According to the CDC, it’s also extremely lethal; it kills 90% to 100% of chickens, often within 48 hours.
“Not by choice but due to federal rules meant to prevent spread,” Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, California, previously told news sources, farmers generally must kill their remaining birds.
Moscogiuri said that approximately 40 million egg-laying hens have died this year as a result of avian flu. According to the USDA, there were 375 million total layers in the U.S. as of Dec. 1, which is down 5% from last year.
The quantity of eggs has declined in lockstep. According to Agriculture Department data issued Dec. 20, about 8.9 billion eggs were produced in November, down from 9.7 billion in December 2021.
“According to Moscogiuri, it’s a supply disruption caused by an ‘act of God.'” “Unprecedented,” he called the situation.
“It’s interesting that inflation is occurring more broadly during the same period,” he added.
Experts said that bird flu typically arrives during the spring migration and disappears by the summer. This year was different; the virus reemerged in September.
Following “September detections” of bird flu, the Agriculture Department revised its production forecast for table eggs downward for 2023 and the remainder of 2022.
The avian flu flare-up is heading towards the peak demand, resulting in the death of many egg-laying hens. Experts said that consumers generally buy more eggs near the end of the year due to holiday baking, for example.
The Agriculture Department suggested in an October outlook report that consumer demand for eggs has also been buoyed by a pivot away from some higher-cost proteins amid broader food inflation.
The consumer price index saw a jump of 2.3% in egg prices in November, and 10.1% in October.
“Egg prices could last into the first quarter of 2023,” said Lapp.
Price pressures appear to be easing, according to Moscogiuri. After the holidays, demand naturally eases, which is partly a seasonal effect. “Record egg prices have dampened demand,” he said.
“Spot prices are becoming increasingly negotiable, which indicates that the market has now topped,” said Moscogiuri. ”
If the spot price falls, the market will most likely follow with a 25-30% correction from current all-time highs.
“This adjustment will likely take place over the next three weeks,” he added. “Any additional, large outbreaks of bird flu could disrupt this trend.”
Egg prices have been declining in recent months, moving opposite those of chicken.
According to CPI data, chicken prices retreated in October and November, falling by 1.3% and 0.8% those months, respectively.
“Layers” of chickens are not affected by avian flu to the same extent as the chickens raised for meat consumption, known as “broilers.”
Moscogiuri said that it is two totally different styles of production and two totally different breeds of bird.
According to Vencomatic Group, a poultry consulting firm, the life cycle of a broiler is much shorter — anywhere from 5.5 to 9 weeks, from hatch to slaughter.
“An egg-laying hen’s cycle can be upwards of 100 weeks,” Moscogiuri said. According to the Agriculture Department, it can take about five to six months for layers just to reach full productivity. Experts said that the latter are therefore more susceptible to bird flu since farmers must keep them alive for a longer time.
Lower chicken prices at the grocery store are also contributed to by the increase in broiler quantity.
The Agriculture Department said that 851 million broiler chicks had hatched in October, which was 5% more than the previous year. A monthly record of 865 million in August was broken, which had previously been set in March 2020.
The Agriculture Department estimates that the total pounds of meat for broilers will rise 2% in 2023 relative to 2022.
Chicken prices are still up 12% compared with October 2021, according to the CPI, despite the recent retreat. The inflation of chicken and eggs is likely caused by the higher prices of commodities such as corn and soybeans, which are the primary ingredients in chicken feed. For example, higher annual energy prices factor into elevated costs for food distribution.