What the cluck is happening with egg prices?

0:01NPR

0:12Last week, Waylon, I drove to a farm in New Jersey to investigate an economic problem at our kitchen table. It was frosty. Snowshoe leather journalism? Is that you crunching on the snow? Indeed, yes. Hi, Brittany. Yes. I was at Cedar Gate Farm to meet farmer Brittany Clindenon. I hoped Brittany could help me answer a question from an indicator listener, Carolyn Burns. What's making egg prices so high? And when will they come back down? Carolyn said her baby daughter eats a lot of eggs. Like Paul Newman. A baby might be the Paul Newman of egg eaters. And yeah, this is a question that a lot of people have been asking over the last month.

0:53It's all over the news. Egg prices are nearly double from a year ago. Some supermarket fridges are empty. So yes, this is not a joke. Not a joke. I can confirm. I was at Target recently. They had zero eggs on the shelf. So I needed to crack the case. Oh, you went on an egg-cellent adventure, did you? I did. This is The Indicator from Planet Money. I'm Darian Woods. And I'm Waylon Wong. Today on the show, egg prices. And when will they come down? Can we afford to eat an omelet ever again? I grill the chickens after the break. Poor chickens. With a microphone.

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2:21Yes. We snatched the eggs from under the hands. You can even feel they're really warm after they lay them. Is that the chicken squawking in protest as you take their eggs? What are you doing? You're like manhandling this head. Yeah, so Cedar Gate Farm is relatively small scale, But Brittany says demand for her eggs is huge at the moment. This weekend, we had a line of cars in the front of our store. That's never happened before. And we sold out within three minutes. Golden eggs. Yes. Brittany sells a dozen of her eggs for$8. And that makes sense. You know, they're straight from a small farm with chickens roaming around outside for part of the year.

3:02They're indoors right now. But with plenty of space, usually these eggs would be at a premium. Now they're actually cheaper than the wholesale price for Midwest eggs. And that includes eggs from battery hens, you know, eggs from cages. Honestly, that is wild that the bespoke eggs are cheaper than the ones that come out of like basically factory farms. Yeah, I spoke to Amy Smith. She's an analyst at Advanced Economic Solutions, a consulting company. Amy says, as you've probably heard, the big factor is bird flu. It's been pretty rampant through egg layers for sure. The egg-laying hens either died from the disease or were culled because they were part of an infected flock.

3:42We lost nearly 20 million in January. And that was on top of tens of millions killed late last year. It is the biggest animal health emergency ever in the U.S. And to put that January loss of around 20 million birds into perspective, before the current outbreak, there was roughly one egg-laying chicken per American. And so what, we have 330, 340 million Americans. So you need somewhere around that number of egg-laying hens. Everyone needs a hen. Everybody needs a hen. And so, you know, when that's happening, it's taking those animals out of the egg-laying flock. And so now there's about 0.8 of a laying hen per American instead of one laying hen per American before the outbreak.

4:30This is so interesting. It's like the per capita hen metric I didn't know I needed. Yeah. And it is worth noting that bird flu is a global issue. You know, it's also infecting other animals like dairy cows and cats. But there's still this question of why now, right? Because I know that this bird flu outbreak has been going on for years now. Yeah, the broad outbreak in the U.S. began in 2022. And Amy says really the problem is that it just keeps getting worse. You know, 2022, we lost somewhere in the neighborhood of 13 % of our total flock. In 2023, we lost somewhere around 4.5%, 5 % of our total flock.

5:10In 2024, it was 12 % to 13%. And so you're continuing to lower your flock numbers, increasing your losses, and that percentage number continues to grow. I should say that there are also a few extra other rising costs, certain feeds, energy, wages. Depends on where you are in the country, of course. But none of those give you quite the dramatic jump in egg prices we've seen. Amy says egg demand between Thanksgiving and Easter is also a factor. Not to mention maybe a little bit of egg stockpiling from people who go to the grocery store and get really nervous. Yes, we talked about that. Somebody at the grocery store saying, oh, they've got eggs in stock.

5:49I don't really need eggs, but let me buy another carton. A bit of hoarding behavior going on. Maybe a little bit. I hate to say the word panic, but I think it's somebody saying, let me get another thing of eggs. This literally happened to me because after I went to Target, they didn't have any. I went to the next grocery store and they did have lots of eggs, but it was limit two per person. And I thought to myself, I should just buy two. Not two eggs, by the way. No, no, two cartons. But then I was like, I actually have an almost full carton in my fridge at home. So then I was like, Waylon, no, because then you are going to be contributing to this problem that I know happens because I'm an economics reporter.

6:24So Darian, I would like a trophy for my self-control because I didn't buy any eggs on that shopping trip. Well, maybe I could give you an egg. Is it still warm? Yeah. So, I mean, egg stockpiling behavior might be great for egg farmers who don't have bird flu on their farms, right? Strong demand, higher prices for their eggs. Yeah, it is true. The stock price of the nation's largest egg producer, Cal Mains Food, has nearly doubled over the last year. So to answer a listener's question, is there an end in sight? Like when might egg prices come back down? Yeah, so the USDA recently changed its inspection rules, which might help.

7:04It was worried that its compensation scheme for farmers who lose chickens to bird flu had unintended consequences. If you're going to get money for lost chickens, you might not put as much effort into stopping the disease from reaching the farm in the first place. This is known in economics as moral hazard. So at the end of last year, the Department of Agriculture issued a new rule requiring more biosecurity audits for farms that have previously had bird flu and are restocking. OK, so they're just trying to get these farms to have better practices to prevent bird flu in the first place. Cleaning, separating animals, all that kind of good stuff.

7:42Vaccinating the chickens is another potential solution to this overall problem. Vaccines are being tested. They've been used in some countries. And based on some of that research, you know, it seems that there may not even be quite a perfect solution. Even the birds that are vaccinated can still carry and shed that virus. So, you know, I think it just makes it more challenging to detect and then contain. That's interesting. So, again, not necessarily a hurdle that can't be overcome, but something that definitely needs to be looked at. And so the price of eggs really depends on how the bird flu outbreak goes, which is anyone's guess.

8:24So no good news for our listener Carolyn, sadly, or her egg-loving baby. Maybe she could visit a small farm like you did, because I bet you got some eggs. I did. And, you know, Brittany's keeping her egg prices the same,$8 a dozen, even with the high demand. I'm not out to price gouge anybody and take advantage of a situation that has nothing to do with me. So I took my$8 eggs and washed them in soap and water, which is a longstanding rule for American producers. And then with those eggs from the farm, freshly laid that day. Ooh, it's like whisking ASMR. I like it. I made a beautiful omelet, well-cooked to the CDC guidelines, given the bird flu outbreak.

9:13Right, because right now, bird flu from consuming eggs is considered a very low risk, but cooking eggs well is recommended. Maybe a souffle is next, Darian. How many more eggs do you have left? I've got plenty. I don't want to brag. Oh, don't brag.

9:32This episode was produced by Corey Bridges with engineering by Robert Rodriguez. It was fact-checked by Cyril Juarez. Cake and Cannon edits the show and The Indicator is a production of NPR.