Egg prices in the US have finally started to drop.
The national wholesale price of eggs (sold loose by the truckload, in this case) dropped 15 per cent in the week ended March 7, according to the US Department of Agriculture’s latest report. It’s been a couple of weeks since the last big avian-flu outbreak, and about a month since the press and lawmakers started making more noise about prices.
Now, our readers can be forgiven for thinking that weekly moves in the price of eggs is not a huge deal. They would be wrong for thinking this, but we can understand.
Maybe they didn’t see John Burn-Murdoch’s work about how global inflation led to unprecedented global turnover in governing parties. Or maybe they’re not interested in food-supply systems or concentration among US agricultural firms. Or maybe they understandably like to eat animal products without thinking too much about where they came from.
But from a purely macro perspective, today’s Consumer Price Index data gives us this preposterous chart:
The average cost of a dozen eggs rose 12.5 per cent on a monthly basis in February. (It’s still 10.4 per cent seasonally adjusted.) That’s a 59 per cent annual increase. This, again, is preposterous, and has brought plenty of attention to the market.
Antitrust lawyer Basel Musharbash argues in a fascinating in-depth series for BIG that industry concentration (at all levels of the market) has removed competitive reasons to rebuild flocks quickly after outbreaks of avian flu.
Another commentator argues in the Atlantic that eggs should be expensive, in part because they’re delicate and break easily. (??) But a different argument in that piece — that cheap eggs require the “immiseration” of hens — conceals a very reasonable point. Factory farms are what churn out the lowest-cost eggs. And because hens are crowded into pretty close quarters in conventional cages, they’re more vulnerable to avian flu outbreaks.
This isn’t stated outright in the USDA’s latest market figures about the avian flu outbreak, but the figures do imply it:
The 30.3 million birds lost included 22.4 million (74%) in conventional caged systems, 7.9 million (26%) in cage-free systems, and 26,000 organic (0.1%). These losses represent 12.3% of the conventional caged layer flock, 7.8% of the non-organic cage-free flock, and 0.1% of the organic flock on January 1, 2025. Compared to January 1, the caged flock on February 1 was down 7.3% while the cage-free flock increased 1.2% and the organic flock 0.6%. As of the end of February, nearly three-fourths of layer losses have occurred in caged systems.
So it’s worth noting another announcement that preceded the decline in egg prices: The US government is spending $400mn “to indemnify producers whose flocks must be depopulated to control the further spread of [avian flu],” and to “aid farmers to accelerate the rate of repopulation, including ways to simplify the approval process to speed recovery.” Meanwhile, the US is cutting grants for cancer research.
