What’s causing the price of eggs to skyrocket nationwide?

Amna Nawaz:

Prices have risen for lots of foods, but the cost of eggs climbed the most in the last year. And consumers and businesses have scrambled to keep

up. What's behind so-called eggflation? Economics correspondent Paul Solman takes a look.

Paul Solman:

Breakfast time at In a Pickle in Waltham, Massachusetts, which means eggs.

Tim Burke, Owner, In a Pickle Restaurant: I would say 70 percent of our menu has eggs in it or revolves around eggs or is egg-centric in some way.

So, omelets, scrambles. It's in our pancake, in our waffle mix, in the French toast mix. People even put eggs on hamburgers too, so it even crosses over to lunch. We have hard-boiled eggs in our salads just a lot of eggs.

Paul Solman:

Eggs that, says chef owner Tim Burke, have — yes, you know it's coming — put him in a pickle.

Tim Burke:

The egg prices are just about 220 percent year over year right now.

Paul Solman:

And that's wholesale prices, forcing Burke to hike his menu, so he doesn't end up in the hole.

Tim Burke:

We only went up 5 percent though, and we priced our eggs out at 15 cents an egg. But they're 50 cents an egg in reality. So we're kind of taking a hit in our margins. And we're just going to hope for the best that it comes down.

Paul Solman:

Well, why not raise it commensurate with the actual cost to you?

Tim Burke:

We wouldn't have many customers walk through the door.

Paul Solman:

So eggs here have become precious.

Tim Burke:

We do have to make our employees aware that this is something, this is a commodity that we need to really handle a bit more carefully.

Paul Solman:

Don't drop the eggs.

Tim Burke:

Right. I mean…

(CROSSTALK)

Paul Solman:

Do you tell them?

Tim Burke:

Yes, of course. Of course, yes.

Paul Solman:

You tell them not to drop the eggs?

Tim Burke:

And, before, when we would mess up an egg or an egg would break, it, was, oh, no big deal, we have another one. Now it's like, oh, it's like, oh, we're mourning that egg.

Paul Solman:

Meanwhile, at the retail grocery store, egg prices soared 60 percent in 2022 alone, more than any other food item, prompting memes all over the Internet.

And one farm group lodges a common complaint: Egg producers are price-gouging.

Economist Brian Earnest says consumers really notice the price hike.

Brian Earnest, CoBank:

On average, consumers are buying roughly 280 eggs a year. Folks always know the last price that they paid for a gallon of gas, and they typically know the last price they paid for a dozen eggs.

Paul Solman:

Multiple factors are driving today's prices, says poultry educator Abby Schuft, including:

Abby Schuft, University of Minnesota: Higher feed prices. Our grain prices, our market grain markets have hit some record highs over the last several months. Transportation costs, labor shortages, as well as labor wages, other inputs, like our energy to heat barns, all of those inputs have increased over the year and have really made an impact just on production.

Paul Solman:

But the biggest driver of eggflation is the worst outbreak of avian flu ever, says Brian Earnest.

Brian Earnest:

We have seen depopulations upwards of 40 million layers over the last year.

Paul Solman:

Out of some 300 million layers, or hens.

Brian Earnest:

You're talking about 15 percent of overall production has been impacted by avian influenza this past year.

Paul Solman:

And why do they have to kill millions of birds?

Brian Earnest:

So the thought process is to try and stamp out the spread, because it is so deadly to the birds. They end up deep populating the entire farm itself and putting up a perimeter around the area.

Paul Solman:

Eggflation isn't hurting everyone, though.

Dan Wildes, Agway:

These are going to be the pullets that we sell in here.

Paul Solman:

At the Waltham Agway store, the hens are healthy and flying while shuffling off the shelf.

Hi, guys.

Chickens are Dan Wildes' bread and butter.

Dan Wildes:

The hens here $30 each. Now, they will be laying eggs at around 18 weeks.

Paul Solman:

But this flock is dwindling.

Dan Wildes:

There was 100 chickens in that three weeks ago. Now there's about six or seven.

Paul Solman:

Why? There has been a chicken run, customers flocking to buy do-it-yourself layers.

Dan Wildes:

Because of the egg prices. Everyone's thinking, I need to get chickens.

Paul Solman:

How much is your business increased once egg prices started skyrocketing?

Dan Wildes:

Forty-five percent, at least. I think the numbers on chicken sales this year with the egg price this is going to be phenomenal.

Paul Solman:

Turkeys and turkey eggs are also popular, though, here, they will never sell their stuff, Edgar, an indoor regular, but also in high demand, chicks.

This is a Rhode Island red?

Dan Wildes:

Rhode Island red.

Paul Solman:

These two-day-olds sell for eight bucks apiece.

Dan Wildes:

So we have already sold about 25 when they came in yesterday, and, by the this weekend, hopefully, we will be down to almost empty.

Paul Solman:

Now, egg prices have ever since peaking in December. But economist Earnest thinks they will stay high.

Brian Earnest:

Consumers will continue to see higher prices for the eggs that they're buying at grocery store chains.

Paul Solman:

Especially since avian flu remains an existential threat, says Abby Schuft.

Abby Schuft:

It looks like it will be here for the foreseeable future.

Paul Solman:

But egg production isn't necessarily a harbinger of persistent overall inflation, says economic historian Adam Tooze.

Adam Tooze, Columbia University:

You would need a series of really negative shocks like this, more and more avian flu to kill more and more birds. You would need the price of bird feed to continuously rise.

Otherwise, what this does is to shock the cost of living once and very grievously and for people on low incomes quite seriously. It's quite difficult to afford eggs right now. But it doesn't result in cumulative inflation, which is a 5 percent increase or a 10 percent increase every year, year on year on year on year.

Paul Solman:

That doesn't mean egg consumers won't continue to feel the pinch for quite a while.

Look, this is pecking me here. Ah!

(LAUGHTER)

Paul Solman:

That actually hurts. Stop it.

As for the folks buying chickens to lay at home, says Tooze, if you add your own labor to the initial investment:

Adam Tooze:

You better have some pretty good reasons for doing that, because, from an economic point of view, it makes no sense.

Paul Solman:

Unless, in the broader sense of economic benefits, you get value from bonding with the animals.

I hear you have very large eggs.

For the "PBS NewsHour" Paul Solman, trying to do so myself in Waltham, Massachusetts.