Fowl business

Eggs-treme prices are shellacking American consumers

During the 2024 presidential election, “the price of eggs” reached meme status as an explanation for voter dissatisfaction with the Biden administration’s inability to resolve inflation concerns. Then-candidate Trump had vowed “When I win, I will immediately bring down prices, starting day one”.

His task hasn’t gotten any easier. An Associated Press headline today reads “US eggs prices hit a record high of $4.95 and are likely to keep climbing”.¹ That represents a nearly 50% increase in just the past three months! Another massive outbreak of “bird flu,” aka highly pathogenic avian influenza (HPAI), is underway. As a result, availability on supermarket shelves is thinning, and some retailers are implementing purchase restrictions.

Bird flu is taking a terrible toll on the country’s poultry population, and that toll appears to be accelerating. Reportedly, more than 150 million birds have been euthanized (“depopulated,” in industry terminology) since the H5N1 strain arose in 2022—and of those, 7 million were culled in Nov 2024, 18 million in Dec 2024, and 23 million in Jan 2025.

However, that total includes a large share of birds that aren’t specifically egg-layer hens. From USDA/Cornell data, I find that the layer population has decreased from 392 million in Jan 2022 to 369 million in Jan 2025—a significant loss of 23 million birds, to be sure, but representing “only” a 6% reduction in “supply”.

---

The supply shock of bird flu is real, but does it tell the whole story? The old adage “never let a good crisis go to waste” may apply, too. One underreported aspect of this whole situation is that egg producers/distributors don’t appear to be hurting. A recent episode of the Organized Money podcast cast a wary eye at Cal-Maine, the self-described “largest producer and distributor of fresh shell eggs in the United States”:

“They never dropped production more than a couple percentage points, and yet their profit margins went up way beyond what that would show… [And] they deliberately slowed down production a little bit to lean into the whole avian flu thing and capitalize on it, so they could have an excuse to raise prices more.”

Is it true? Crucially, Cal-Maine is a public company, so we’re able to peek behind the curtains of their operations. I pulled a handful of key metrics from their past four annual reports (going back to the year prior to this bird flu crisis). From mid-2021 to mid-2023, Cal-Maine’s net profit margin jumped from a measly 0.2% to 24.0%, and their total eggs sold increased year-over-year.²

Beyond just educated guessing at the implications of those numbers, it’s also worth considering a court finding from a little over a year ago. In Nov 2023, a federal jury found Cal-Maine and other leading egg producers guilty of price gouging over a period of several years in the ‘00s:

“The jury found that the egg suppliers exported eggs abroad to reduce the overall supply in the domestic market, as well as limited the number of chickens through means including cage space, early slaughter and flock reduction, court documents say.”

Who, by the way, were the plucky, underdog consumer watchdog groups that dared take on the egg cartel? Ha, actually, the lead plaintiff was Kraft Foods, joined by Kellogg’s, General Mills, and Nestle! (The case was filed all the way back in 2011, and technically, two of those companies don’t exist anymore.) Big CPG didn’t take kindly to the threat to their input costs, and reacted accordingly.

---

Two other tangents had me curious. The first stems from news reports and my own observations that typically “premium” eggs (e.g. cage-free)—the type I tend to buy—have experienced relative price stability. This seems to be confirmed from Cal-Maine’s annual reports, too, where “conventional” egg prices have at times been higher than “specialty”!³

The reason is grim. Bird flu policy in the US requires that entire flocks must be culled when even a single bird on a farm tests positive. Cage-free, free range, and pasture-raised sites tend to have smaller bird populations, ergo dozens, hundreds, or maybe thousands of birds are sacrificed when a site is hit. On the other hand, conventional layers tend to operate at far greater scales, necessitating the slaughter of hundreds of thousands, sometimes millions, of birds at an affected facility.

I was also wondering why there have not been dramatic price increases for chicken meat. Chickens raised for eating (“broilers”) are raised in different types of sites than layer hens. And—again, grim—because of their purpose, they tend to have much shorter lifespans: 6-7 weeks for broilers, compared to the 18-24 months that commercial layers have before they are considered “unproductive”. In short, chickens raised for meat are less likely to be around long enough to catch bird flu.

---

“Relief is not expected any time soon,” the AP article notes. Easter, which typically marks the annual high point for egg demand, is still two months away. Until then, American consumers will be walking around on eggshells.

For what it’s worth, a timely reminder as we approach Valentine’s Day: if you’re looking for a scarce, expensive gift to say “I love you”… consider buying your partner a carton of eggs!

Original pre-meme photo from Terrence Irving Photography

1. The prices cited refer to the average price of a dozen Grade A large eggs as reported by the U.S. Bureau of Labor Statistics.

2. While the ensuing year ending mid-2024 saw a dip in net profit margin, it was still at 11.9%. Further, the company’s latest quarterly filing shows that the first half of their current fiscal year is a return to form, with a net profit margin of 21.2%, annual revenue and volume on pace to be its highest in this period, and potentially average egg price, too.

3. The chart includes Cal-Maine’s latest reported half year (“26 weeks”) average sales prices, for the time period ending Nov 26, 2024.