Egg Prices Are Surging

What It Means for Your Budget, Business, and the Food Industry

Author

Samonae Carter
January 27, 2025

Egg Prices Are Surging: What It Means for Your Budget, Business, and the Food Industry

Egg prices have risen by over 20% in the past year, challenging consumers, businesses, and the food supply chain. For the Micro Monies community, this isn’t just about higher grocery bills—it’s an opportunity to explore resilience, market analysis, and practical solutions. Let’s dive into the factors driving the shortage, lessons for adaptation, and alternatives that can help consumers and businesses adjust.

Avian Flu Crisis
The U.S. is facing its worst outbreak of Highly Pathogenic Avian Influenza (HPAI) in history. Since January 2022, nearly 110 million birds have been impacted, including millions of egg-laying hens. HPAI spreads rapidly through wild migratory birds and poultry farms, devastating flocks and reducing national egg production by nearly 10%.

  • Regional Impacts: Key egg-producing states like Iowa, Utah, and Oregon have experienced significant losses, contributing to reduced supply.

  • Operational Challenges: Farms have had to cull entire flocks to prevent further spread, slowing recovery as new hens take months to mature.

  • Biosecurity Costs: To manage the outbreak, farms are spending heavily on disinfection and monitoring, further driving up costs.

Rising Production Costs
Inflation has increased the costs of feed, fuel, and labor for farmers across the agricultural sector. These rising expenses have been passed down to consumers and businesses, compounding the strain on household budgets and food-based industries.

Increased Demand
Egg consumption traditionally spikes during the holiday season, with baking and cooking needs driving demand. Beyond this seasonal surge, per capita egg consumption has grown nearly 5% over the past two decades, reflecting eggs' role as a versatile and affordable protein source.

Policy Shifts
States like California and Massachusetts have implemented cage-free egg mandates, requiring all eggs sold in these states to come from hens raised in cage-free systems. While these policies aim to improve animal welfare, they have also led to:

  • Higher production costs as farmers retrofit or rebuild facilities.

  • Supply chain bottlenecks due to reduced availability of compliant eggs.

  • Market consolidation, as smaller farms struggle to afford the transition.

The Pros and Cons of Cage-Free Egg Mandates

Benefits:

  • Improved Animal Welfare: Hens in cage-free environments experience better living conditions and can engage in natural behaviors.

  • Consumer Transparency: These laws help consumers make informed choices by standardizing animal welfare practices.

  • Market Competitiveness: Farmers who adopt cage-free systems gain access to premium markets where ethically sourced products are in demand.

  • Alignment with Global Trends: Similar policies in the European Union and beyond position U.S. producers to compete globally.

Challenges:

  • Higher Costs: Transitioning to cage-free systems requires significant investment, raising prices for consumers.

  • Reduced Productivity: Cage-free systems often lead to lower egg production and higher bird mortality rates.

  • Supply Chain Disruptions: Complying with state-specific mandates creates logistical challenges for producers and retailers.

  • Consumer Burden: The higher cost of cage-free eggs disproportionately affects low-income households.

How This Impacts Consumers and Businesses

Consumers:

  • Tighter Budgets: Rising egg prices force households to adjust spending or explore alternatives like plant-based egg substitutes.

  • Resilience Building: Learning to adapt budgets for inflationary pressures is a key takeaway from this crisis.

  • Allocating part of your revenue toward handling sudden increases in operational costs is just as critical. This could mean having a strategy for managing supply price surges or adjusting budgets dynamically when necessary.

Businesses:

  • Increased Costs: Food-based businesses are facing higher ingredient prices, impacting profitability.

  • Customer Pushback: Price-sensitive customers may spend less, requiring businesses to innovate and communicate effectively.

  • Supply Chain Vulnerabilities: The egg shortage highlights the need for diversified suppliers and contingency planning.

  • Budget Flexibility: Build contingencies into your operating budget for sudden increases in material or ingredient costs. This might include reserving a portion of your revenue for supply price fluctuations or establishing a price adjustment plan in case your costs rise.

What Can the Micro Monies Community Learn from This?

The egg price surge offers a broader lesson in resilience and adaptability for both personal and business finances:

  • Budget Flexibility: Plan for unexpected increases in essential expenses by building some cushion into your budget. Having a cushion in your monthly budget helps absorb rising costs without derailing other priorities. An emergency fund designated for essentials, like groceries, can provide peace of mind.

    Track your spending consistently to identify areas where you can cut back temporarily if needed. Revisit your budget regularly to reallocate savings toward covering essential items, like eggs or other staples. Budgeting apps like YNAB may be helpful for this.

  • Explore Substitutes: Experiment with alternatives that reduce dependency on volatile staples.

    For Individuals: Substituting eggs with affordable alternatives—like flaxseed, chia seeds, or aquafaba—can help manage costs while maintaining quality in recipes. Beyond eggs, exploring other substitutes for rising staples can provide additional savings.

    For Businesses: Restaurants, bakeries, and food manufacturers can adjust menus or recipes to incorporate alternatives without sacrificing quality or customer satisfaction. This could also mean offering new products that naturally require fewer eggs.

  • Diversify Supply Chains: For businesses, sourcing from multiple suppliers can reduce the risk of disruptions. Relying too heavily on a single supplier or source for essential goods increases vulnerability to disruptions like price surges or shortages. Expanding your supplier base, including working with local or smaller-scale producers, can reduce risks and provide flexibility. Establishing relationships with multiple suppliers also increases bargaining power during shortages.

  • Share Pricing & Substitution Updates with Your Customers: For businesses, transparency about price changes and ingredient substitutions builds trust with customers.

Stay Informed

Knowledge is power, especially when navigating a rapidly changing market. Staying informed about supply chain trends, inflation reports, and regulatory changes allows individuals and businesses to make proactive adjustments.

Consider following sources like the USDA, the Bureau of Labor Statistics, or local agricultural reports to stay updated on price changes and supply issues. Knowing when prices are likely to rise, or fall can help you adjust your purchasing habits.

Monitoring market trends helps businesses anticipate disruptions, manage costs, and plan for new sourcing options or pricing strategies.

The egg price surge is a powerful example of how external events can disrupt both personal and business finances. Whether it’s adapting recipes at home, sourcing smarter for your business, or planning for future disruptions, these strategies offer a framework for navigating not just this crisis, but future ones as well. Change is inevitable, but preparation and adaptability make all the difference. How are you handling rising costs in your household or business? Have you been affected by other food products? Let’s continue the conversation - leave a comment on this post!

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Samonae (Sam) Carter
Founder, Micro Monies 

Micro Monies is a community-driven space where financial literacy meets entrepreneurial strategy. More About Micro Monies

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