Breakfast connoisseurs and Easter enthusiasts may be surprised by the rising price of eggs this spring.
They might be even more surprised to learn that they should be paying much more. It turns out that most grocery stores lose money on every dozen eggs they sell.
A survey conducted by the American Farm Bureau Federation found that on average egg prices are 37 percent higher than this time last year, at $1.80 per dozen. That’s a swing from 2017 when the survey found that egg prices had gone down 41 percent from spring 2016, to $1.32 per dozen.
The price increase can be credited to an uptick in American and foreign demand for eggs while American production stayed level, said Veronica Nigh, an economist at the American Farm Bureau Federation. The hike in foreign demand was exacerbated by a 2017 bird flu in South Korea, leading to a 663 percent increase in American egg exports there from 2016 to 2017, Nigh said.
Just within the United States, 2017 saw a 20-year record in egg consumption at 275.2 eggs per year, up half an egg from the year before.
“When you start multiplying that by 330 million [people], that’s a lot of eggs,” Nigh said.
According to Bloomberg News, wholesale egg costs have seen an even more acute spike in the past few weeks, federal data show. In the Midwest, the wholesale cost of a dozen eggs more than doubled in the five weeks through March 23 to $2.71. That’s a record since August 2015 when prices hit a record $2.77 during a bird flu outbreak.
But what hasn’t changed is that grocery stores sell eggs at a loss and can afford to post prices below their wholesale cost because shoppers will reliably buy eggs as a staple. And grocery stores know that once shoppers are in the door, they most likely will grab other items on their way to check out, whether they planned to or not.
David J. Livingston, a supermarket research analyst, said grocers can sell a dozen eggs at a loss even though “nobody’s getting rich on 49 cents a dozen.” Similar to milk and bananas, stores hope that once they draw customers in for staple items, they’ll profit off other goods.
“Most people just don’t have that kind of discipline,” he said. “For the most part, consumers can be pretty reckless in their shopping.”
The seasonal survey conducted by the American Farm Bureau tracks a bundle of 16 goods to see how prices compared to the previous year. The spring basket includes flour, apples, vegetable oil and orange juice, among other items, and went up $1.02 — or 2 percent — overall compared to spring 2017.
Within the bundle, orange juice went up 8 percent to $3.46 per half-gallon, due in part to devastating hurricanes that took a toll on citrus production. Several foods decreased in price slightly from the year before, including whole milk, white bread, chicken breasts and potatoes.
Easter may be a seasonal driver of egg consumption around the world, but Nigh said the holiday was not a big factor in the recent hike in prices. And in the long term, egg production is likely to increase to match demand, and prices may slowly decline as a result.
Still, that won’t happen in the next few days, leaving customers to decide how much they’re willing to spend to fill their Easter baskets.
“Maybe they’ll find alternatives to the Easter egg hunt,” Nigh said.”Or maybe they say, ‘this is too important of a tradition. We’ll pay the 37 percent increase.'”