- The price of eggs has surged in the past year. Only margarine prices have risen more, according to the consumer price index, a key barometer of inflation.
- Egg prices rose 10% just in the month of October. Meanwhile, chicken prices fell 1.3%.
- That opposite movement may seem counterintuitive. It's largely attributable to one of the worst-ever outbreaks of bird flu in the U.S., which has killed a large share of egg-laying birds but not those raised for meat consumption.
Which (price change) came first, the chicken or the egg?
Grocery prices are increasing at their fastest pace in decades — none more so than eggs. Yet chicken prices fell in October.
It may seem counterintuitive that egg and chicken prices moved in opposite directions.
The dynamic is primarily due to a severe outbreak of bird flu in the U.S. — which has killed many egg-laying hens but has largely left chickens raised for meat production unscathed, according to economists.
"A lot of things are up since 2020," said Bill Lapp, president of Advanced Economic Solutions, a consulting firm specializing in food economics. "But the recent spike is extraordinary in the shell-egg as well as egg-product markets."
The average price of a dozen large, Grade A eggs in the U.S. is almost double what it was a year ago
Money Report
Egg prices spiked by 10% in October, the largest monthly increase of any grocery item, according to the consumer price index, issued Thursday by the U.S. Bureau of Labor Statistics.
By comparison, monthly prices jumped 3.8% for the No. 2 category, "food at employee sites and schools." That's less than half the increase for eggs.
Consumers paid an average $3.42 for a dozen Grade A, large eggs in October — up from $1.82 a year earlier, according to federal data.
Only inflation for margarine (47%) has eclipsed the overall egg category (43%) since October 2021, according to the consumer price index.
More from Personal Finance:
It could be cheaper to dine out on Thanksgiving this year
Here's the inflation breakdown for October 2022 — in one chart
Here are 4 of the best ways to pay for holiday gifts
An 'unprecedented' egg supply disruption
Surging egg prices are primarily the result of one of the worst-ever outbreaks of avian flu in the U.S.
About 50.3 million birds have been impacted by the virus since early February 2022, according to recent data from the Centers for Disease Control and Prevention. These figures include birds like turkeys and ducks, too.
Bird flu is relatively rare in the U.S. The last bout was in 2015, when a record 50.5 million birds were impacted, the CDC said. The flu hadn't emerged in at least a decade or two prior to that, Lapp said.
Here's why this matters: Avian flu, which is generally carried by wild birds like ducks and geese, is "highly contagious," the New Jersey Department of Agriculture warned last month. It's also extremely lethal; it kills 90% to 100% of chickens, often within 48 hours, according to the CDC.
Farmers generally must kill their remaining birds — not by choice but due to federal rules meant to prevent spread, said Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, California.
As a result, about 37 million egg-laying hens — "layers," in industry shorthand — have died since the beginning of 2022, Moscogiuri said. They account for about 10% of U.S. production, he said.
Egg quantity has cratered in lockstep. About 8.8 million eggs were produced in September 2022, down from about 9.7 million in December 2021, according to most recent data from the U.S. Department of Agriculture.
"It's a supply disruption, 'act of God' type stuff," said Moscogiuri, who called the situation "unprecedented."
"It's kind of happenstance that inflation is going on [more broadly] during the same period," he added.
Inflation, holiday recipes are boosting egg demand
Bird flu typically arrives during the spring migration and disappears by the summer, experts said. But this year was different; the virus re-emerged in September.
In October, the Agriculture Department revised its production forecast for table eggs downward for 2023 and the remainder of 2022 following "September detections" of bird flu.
That avian flu flare-up — and its associated death toll for egg-laying hens — is running headlong into peak demand season, when consumers use more eggs for holiday baking, experts said.
Consumer demand for eggs has also been buoyed by a pivot away from some higher-cost proteins amid broader food inflation, the Agriculture Department suggested in an October outlook report.
Elevated egg prices "could last into the first quarter of 2023," Lapp said.
'Broilers' are less affected by flu than 'layers'
Meanwhile, chicken prices retreated in October, falling by 1.3% during the month.
The wholesale price of chicken breast has fallen below $1.20 a pound, a third of its peak around $3.60 over the summer, for example, Lapp said.
Chickens raised for meat consumption — known as "broilers" — aren't affected by avian flu to the same extent as the "layers."
"It's two totally different styles of production, two totally different breeds of bird," Moscogiuri said.
The lifecycle for a broiler is much shorter — anywhere from 5.5 to 9 weeks, from hatch to slaughter, according to Vencomatic Group, a poultry consulting firm.
However, the lifecycle for an egg-laying hen can be upwards of 100 weeks, Moscogiuri said. It can take about five to six months for layers just to reach full productivity, according to the Agriculture Department.
The latter are therefore more susceptible to bird flu since farmers must keep them alive for a longer time, experts said.
Broiler quantity is also up, contributing to lower chicken prices at the grocery store.
For example, about 865 million broiler chicks hatched in August — 2.9% higher than August 2021 and a monthly record, which had previously been set in March 2020, the Agriculture Department said.
Broiler "placements" have also climbed in recent weeks, hitting a record 194.2 million chicks in the week ended Sept. 17, according to the Department. The agency raised 2023 production forecasts on that "optimistic" hatch and placement data.
Despite the recent retreat, chicken prices are still up 14.5% compared to October 2021, according to the CPI. Higher prices for commodities like corn and soybeans — the primary ingredients in chicken feed — have likely contributed to inflation for chicken, as well as eggs. Higher energy prices also factor into elevated costs for food distribution, for example.
