By Daniel Wiener Broner | CNN
For many months, the price of eggs was soaring. Now they are having a blast.
As of last week, wholesale market prices for midwestern large eggs, the benchmark for eggs sold in the shell, were just $0.94 per dozen, according to independent price reporting agency Arner Barry.it’s a steep drop from $5.46 per carton Exactly half a year ago. (At retail, prices are well above $1 per carton, but prices are also dropping.)
Why did it decline? It was the reversal of demand and supply that caused the price hike in the first place.
last year, deadly bird flu A significant number of laying hens became extinct, reducing the egg supply. On top of that, farmers have had to deal with soaring feed and fuel prices.
The turmoil has allowed producers such as Cal Maine Foods, the largest egg distributor in the United States, to cover significant price hikes. rake in huge profits.
But now that supplies are back on track and the industry is gearing up for a bird flu outbreak this year, the deadly virus appears to be under control. On the other hand, demand has not kept up.
The drop in wholesale prices began in late March, said Karin Rispoli, senior egg market analyst at Arner Barry. Prices hit an annual low in early May and have remained largely stable since then, he said.
“While bird flu dominated the egg market in 2022, this year’s market is dominated by the absence of bird flu,” Rispoli told CNN.
About 308 million chickens were laying eggs for consumption as of early December, down from about 328 million in December 2021, according to the U.S. Department of Agriculture. However, the number has continued to grow since then. As of April, 314 million egg-laying hensaccording to the USDA.
egg?of this economic?
As the bird flu situation improves, the supply of eggs is increasing, while consumer demand is also declining.
One reason is that shoppers bought less in response to rising egg prices. When prices were skyrocketing, “everybody and his brother were talking about what was going on with egg prices,” said Amy Smith, vice president of consulting firm Advanced Economic Solutions.
The Egg has become “a symbol of what is happening with inflation,” Smith added.
In the four weeks ending April 22, U.S. retail egg sales fell 4% from a year earlier, according to NIQ, which tracks retail sales. (Nevertheless, egg sales remain generally stable. NIQ data shows unit sales were broadly flat for the year through April, despite rising prices.)
Headlines aside, shopper demand for eggs typically dwindles in late spring, experts say.
“This is the time of year when demand is a little more subdued,” said Brian Ernest, chief economist for animal protein at Cobank.
Demand for eggs typically peaks around winter break when people bake and eat breakfast at home, and although it slows in the first quarter, it’s usually relatively strong. Not so this year.
“Shoppers are budget-conscious at this time of year, so they’re going to put more eggs in their baskets than usual,” he said. But in a high-price environment, they won’t overbuy. ”
Demand for eggs is unlikely to pick up again for several months. After Easter and Mother’s Day, demand typically drops until the back-to-school season.
“Wholesale prices are entirely market driven. They are not set by egg farmers,” said the president and CEO of the American Egg Board, a funder of farmers working to increase egg demand in the United States. (CEO) Emily Metz said.
Will supermarket egg prices drop?
Wholesale prices are plummeting, but that doesn’t mean consumers can get the same price. Egg retail prices are falling at a more moderate level.
Recent data from the Bureau of Labor Statistics show egg prices fell 1.5% from March to April, taking into account seasonal fluctuations. (On an annual basis, prices remain high. Egg prices were 21.4% higher in the year to April.)
Wholesale prices are usually more volatile than retail prices. That’s because supermarkets and grocers set retail prices for eggs and don’t want customers to be scared away by the volatility. As such, grocery store prices do not follow wholesale trends as quickly.
“Retailers don’t necessarily cut prices because wholesale prices go down,” Ernest said. “Consumers will therefore still be exposed to higher price points, and it will take some time for that to dissipate.”
Smith of Advanced Economic Solutions expects food prices to “roll down.”
Retailers may be holding their breath for another egg mess, she noted.
“We’re going to make sure we don’t disrupt the market before they completely discount something,” she said.
The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
https://www.eastbaytimes.com/2023/05/16/us-egg-prices-are-crashing-heres-why/ US egg prices are crashing.Here’s why