United States: Egg prices are ascending, thrusting this everyday essential back into prominence as consumers remain apprehensive not just about inflation but the steep cost levels themselves.
July marked the third consecutive month where egg prices escalated year-over-year, a stark contrast to a preceding period of relative declines. The primary catalyst? A relentless struggle against the highly pathogenic avian influenza, commonly known as HPAI or the bird flu, according to the reports by CNBC News.
According to the recently released Consumer Price Index (CPI) data, the cost of this crucial foodstuff skyrocketed by 19.1 percent in July compared to the same month in the previous year. In contrast, the overall CPI basket of goods increased by a mere 2.9% over the same timeframe.
Egg price inflation became a focal point for consumers during the pandemic due to their widespread use in daily culinary practices. Price hikes in eggs and other groceries have been a significant concern for consumers grappling with escalating costs, further dampening consumer sentiment in recent years, as per CNBC News.
However, the latest wave of inflation seems more closely linked to a nearly 8% surge from March to April, likely tied to seasonal patterns in the bird flu. This marked the most substantial month-over-month increase since the spring of 2023.
“The short answer, we believe, is related to avian influenza,” stated Caitlinn Hubbell, a market research analyst at Purdue University’s Center for Food Demand Analysis and Sustainability in West Lafayette, Indiana. “As unfortunate as it is, the high-path avian influenza has persisted.”
The bird flu experienced a historic outbreak in 2022, with another resurgence at the close of 2023. More recently, Hubbell noted that outbreaks in Colorado and California have exacerbated supply challenges.
Reportedly, egg demand is considered “inelastic,” Hubbell explained, meaning consumers typically purchase the same quantity regardless of price fluctuations. Conversely, she pointed out that consumers generally do not stockpile when prices drop.
Inelastic goods are prone to significant price shifts from even minor supply changes, she said, highlighting the impact of any bird flu outbreaks on the prices visible on grocery store shelves.
For consumers, this has translated into elevated prices. The average price for a dozen large, Grade A eggs surpassed USD 3 in July, marking the first time in over a year, according to the Bureau of Labor Statistics, as per the reports by CNBC News.
Despite this recent surge, prices remain more than 20 percent below the levels observed last year. Nevertheless, egg prices within the CPI basket have risen approximately 42 percent compared to July 2021.
Looking ahead, Hubbell indicated that future price trends would depend heavily on the state of the bird flu. However, she expressed cautious optimism that consumers might see some relief if upcoming seasons are less likely to bring about new outbreaks.
“It’s difficult to predict,” Hubbell said. “It all hinges on the scale and scope of HPAI’s impact.”