Egg prices have sent shoppers on a rollercoaster this year. May’s CPI shows inflation slowed, but food prices, housing prices and the cost of used vehicles are all attributing to current inflation.
The most sizable drop came with egg prices. The CPI shows egg prices now average $2.66 per dozen, which represents the following changes:
- 13.8% lower month-over-month
- That represents the largest monthly decline since January 1951
- Year-over-year, prices are only down 0.4%
Before shoppers get too excited, some historical perspective shows egg prices are still higher than average. A decade ago, egg prices were $1.91 per dozen. Even in 2020, egg prices were lower, averaging $1.51, which is more than $1 lower than what grocery shoppers are paying today.
While the sudden decline may seem like shoppers are getting a bargain, it’s similar to what drivers experience with gas prices. When prices for a gallon of gas go from $2 to $4, then come back down but only to $3, it feels like prices are much cheaper, when in reality, prices are still higher than they were before the rapid spike.
Why Did Egg Prices Spike Higher Earlier This Year?
According to economists, the rapid rise in egg prices was a function of supply and demand. In January, avian influenza caused U.S. egg producers to lose more than 50 million birds, many of those being commercial laying flocks. Couple that with high holiday demand for things like baking, and the two factors clashed to create higher prices at the store.
“We’ve had a significant reduction in supply from depopulation this spring and again in the fall and winter,” Lusk told AgWeb in January. “Couple that with inelastic demand for eggs, and you get the price spikes we’re seeing.”
Expensive Eggs Ate Into Bacon Demand
The CPI shows the price of bacon and related products fell 9.8% year-over-year. It’s also a 1.4% decline in a month. Prices may be on the decline, but one livestock economist thinks it’s possible the high egg prices also caused shoppers to buy less bacon.
During World Pork Expo last week, Steve Meyer of Partners for Production Agriculture, explained why he has a bleak outlook for the pork producers’ profits this year. One reason is demand. Meyer also explained it’s not just due to the 35% spike in input costs compared to 2019, but also lower hog prices.