Eggs are getting less expensive—for stores, not shoppers

Eggs are getting cheaper for retailers. For consumers, they are still expensive.

Wholesale prices of Midwest large eggs have declined to $2.81 a dozen, according to research firm Urner Barry, down nearly 50% from a record high of more than $5 a dozen in December, but higher than $1.30 a dozen in January 2022. 

Retail prices for a dozen regular eggs have stayed in the $4 range, NielsenIQ data show, and sold for $4.40 for the week ended Jan. 21.

An avian-influenza outbreak has wiped out tens of millions of egg-laying hens, pushing up egg prices in recent months. The prices of eggs rose more than any other grocery item in 2022, and some supermarkets have said they lost money on eggs for weeks last year to keep prices competitive and maintain store traffic.

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"Customers are so sensitive to the price of eggs right now," said Scott Karns, chief executive of Karns Foods in Pennsylvania.

The grocer is selling large eggs for $3.39 a dozen this week after paying a wholesale price of $2.75 for them, Mr. Karns said. There is often a lag between wholesale prices—what suppliers charge—and the retail prices that consumers pay as supermarkets try to sell through the inventory they have on hand, he added.

In New York, Morton Williams Supermarkets hasn’t made major changes to egg prices but expects to lower them next week, said Steve Schwartz, director of sales and marketing at the grocery chain. The company has avoided adjusting prices prematurely and wanted to make sure decreases were here to stay, he said.

Demand typically falls after the holiday season, during which people bake more and eat warmer breakfasts. The decline has been steep this year as high prices prompted some shoppers to buy fewer eggs. U.S. retailers sold about 10% fewer eggs for the week ended Jan. 21 compared with the same period a year ago, according to data from NielsenIQ. 

Retail prices will take a while to come down as food sellers will be reluctant to bring prices down, only to increase them again if another surge in bird-flu cases occurs, said Brian Earnest, a lead animal-protein economist at agricultural lender CoBank. 

The deadliest outbreak of avian-influenza on record has devastated poultry flocks across the U.S. since February of last year, killing about 58 million birds, including more than 43 million egg-laying chickens.

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The outbreak, along with higher feed, fuel and packaging costs, has helped raise egg prices since the start of last year, industry analysts said. Egg supplies are expected to remain constrained through the first three months of 2023, according to analysts from agriculture lender Rabobank. 

Egg producers are rebuilding their flocks faster than during previous outbreaks, according to the American Egg Board, which represents egg producers. Entire flocks of birds are killed after the disease has been detected to prevent the spread. 

Wendong Zhang, an agricultural economist and assistant professor at Cornell University, said the faster rebuilding of flocks will help, but prices are likely to remain higher than their historical averages as long as the bird-flu outbreak persists. 

"We could see some reduction in prices in the immediate future," he said. "If the flu comes back, we’ll have some spikes again."

Bird-flu cases in commercial flocks were tempered in January, with fewer than 500,000 total bird deaths compared with more than 5 million in December, according to U.S. Department of Agriculture data. However, USDA officials have said the virus will likely surge back during the spring migration season, when wild birds move across the country.

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Rosemary Sifford, the USDA’s chief veterinary officer said: "We expect that they will continue to be carrying it this spring."