`Eggflation': Will prices drop in California?
Egg prices should be dropping in California this year. But they're still likely to be a lot higher than a year ago.
“The price should be coming down in the next few weeks/ months because of increased supply,” said Bill Mattos, president of the California Poultry Foundation.
But California prices are expected to remain higher — often much higher — than elsewhere around the country.
The latest price for a carton of large eggs in California averaged $5.62 at the end of January, according to the U.S. Department of Agriculture. That's down from $7.37 at the start of January, but far more than the roughly $4 a carton that's the national average.
The agriculture department found that nationwide, retail egg prices were up 59.9% in December over a year earlier, when a carton of eggs in California averaged about $2.35 a dozen.
When will this California price surge end? And is it triggering something bigger, a reluctance of consumers to pull back on spending on other items?
Any specific timeline for when the egg price surge will be over?
Answer: It's hard to pinpoint a precise time. But “the good news is that we're already seeing wholesale prices drop following peak holiday demand, and we anticipate that lower retail prices will follow,” said a statement from the American Egg Board.
Why are California egg prices so high?
Answer: California prices tend to be higher in general, and “We ban the sale of conventional eggs and require at least cage free eggs. These are generally much more expensive,” said Daniel Sumner, a professor with the University of California, Davis Department of Agricultural and Resource Economics
Why have prices spiked nation
ally?
Answer: The Avian flu outbreak in the Midwest and East Coast is the major reason for the higher prices.
“We have lost up to 50 million layer chickens in the Midwest and East Coast, which hit the supply hard. It has taken a few months for these farms to re-populate their flocks and increase supply,” Mattos said.
Other factors would seem to influence egg prices, notably the price of fuel. How will that affect prices?
Answer: Mattos said the higher cost of eggs is also due to supply chain problems. And, he noted, “rising energy, feed and transportation costs are significantly higher than a year ago. So this has been the perfect storm.”
Has the Russian invasion of Ukraine and its effect on grain and fuel prices had any impact?
Answer: “About zero. The war contributed a little to higher corn and soy which raised the cost of eggs a little, but that is just a very small part of high egg prices for consumers,” Sumner said.
Eggs, like gasoline, are prices that are familiar to consumers. If they see big spikes, do they start cutting back on other items?
Answer: Economists don't see “eggflation.”
“We can't say there's a one to one relationship,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board, which tracks consumer confidence. Confidence is usually dramatically jolted by unexpected events, such as the Sept. 11, 2001, terrorist attacks or the sudden onset of the COVID-19 pandemic in 2020.
In addition, eggs are not a huge part of a consumer's budget. The federal Bureau of Labor Statistics, which compiles monthly price data, says eggs constitute a small amount of household's expenses, roughly the same percentage as soup and ice cream.