Jan. 22 (UPI) — Sharply rising egg prices across the United States blamed the ongoing H5N1 avian influenza outbreak are mostly being passed along to consumers by grocers and restaurateurs, but some are holding back.
Shoppers and diners for the most part are experiencing sticker shock as egg prices have soared nearly 40% in a year and are are continuing their upward trajectory in the first month of 2025.
But not all such businesses are merely socking consumers with the full freight of the price spike. At least some have declared they want to demonstrate their commitment to their customers by holding the line on prices and are willing to absorb the hit to their bottom lines — at least so far.
Outbreaks accelerate
The average wholesale price for a carton of a dozen large or extra-large white eggs stood just about at $6 across the United States as of Jan. 10, according to the USDA. Medium white eggs were going for an average of $3.93 per carton.
A survey of local Stamford, Conn., grocery stores performed last week by the news website CT Insider found retail egg prices ranging from $6.99 per dozen at ShopRite and Grade A Market to $3.24 at Trader Joe’s.
The spotty supply of eggs also was evident during the website’s survey.
“Repeated outbreaks of Avian (Bird) Flu have affected the supply of eggs,” a poster announced at ShopRite’s dairy section. “As a result, we have seen higher costs from our suppliers. We will continue to work with our suppliers to ensure availability.”
Across the United States, the situation was similarly strained as agriculture officials warned prices won’t likely be coming down anytime soon. In fact, USDA economists are predicting egg prices will rise another 11.4% in 2025 because of continuing outbreaks of highly pathogenic avian influenza, or HPAI, which initially began in February 2022.
In November, the number of egg-laying chickens in the United States was down 3.1% from the same time the year before as the result of new outbreaks among poultry flocks around the country, including the first one detected in Puerto Rico.
More than 18.2 million birds were affected in December alone — by far the highest monthly total yet during this outbreak — and an additional 6 million birds have been affected so far in January, the USDA reported Jan. 15. More than 20 million egg-laying chickens died of the disease in the fourth quarter.
“This is going to take time, and we don’t know how the avian flu is going to keep evolving,” Wisconsin Grocers Association President and CEO Mark Semmann told WKBT-TV in La Crosse, adding that farmers and grocers are generally finding success in keeping shelves stocked despite the challenges.
“In a perfect world, you would see this in a couple of months start to stabilize,” he told the broadcaster. “But Wisconsin retailers, I think, are a little more optimistic and I can tell you the farmers we have talked with are working really, very hard to make sure there is adequate supply.”
Some shoppers in northeastern Wisconsin were finding prices as high as $8 for an 18 count pack of eggs.
Grappling with consumer reaction
Most grocers are responding to the dwindling supply of eggs and rising wholesale prices by passing those increases along to consumers, despite their unhappiness.
For example, in the small northeastern Iowa town of Solon, about 15 miles south of Cedar Rapids, one grocer says he understands shoppers’ chagrin, but adds they accept that the avian flu is a legitimate reason for the higher prices.
“I think with inflation overall going through the grocery world, people — they’re not happy with it, but they’re not surprised when they see it happen,” Sam Lensing, owner of Sam’s Main Street Market, told KCRG-TV. “At least the bird flu is a real excuse on why some things are getting jacked up in price.”
With the price of a carton of a dozen large eggs standing at $6 at Sam’s, Lensing said the situation is not an easy one.
“I think it’s a big supply/demand thing,” he said. “And right now the supply is getting pretty tight.”
And it’s not just grocers who are feeling the heat. Restaurants are also raising their menu prices to cover the egg price increases. Many of them buy eggs in cases of 30 dozen, and while such a case would have cost $50 last year, they now go for around $100, putting eateries under big pressure to pass those increases along to diners.
“We’re trying to debate whether to raise prices or hold them down and try to wait it out,” said Crissy Tillman of Scotties Diner in Powell, Tenn., which is mainly a breakfast place and so goes through 120 cartons of eggs per week.
“We’ve decided to wait it out for now,” she told WVLT-TV.
Holding back price increases
While most retailers and eateries are passing along the egg price increases to consumers, at least a handful of others are taking the opposite tack, keeping prices steady and reducing profit margins to bolster consumer loyalty.
For instance, in Corpus Christi, Texas, entrepreneur Jordan Jaradat, who owns a restaurant and grocery store, said that’s the route he’s taking.
“For the restaurant business, we probably use 4,000 eggs a week. That affects our profit margins, but at the same time, we did not increase our price on eggs,” he told KRIS-TV.
One the clearest examples of a grocer deciding to hold the line on retail price increases was provided by the Connecticut supermarket chain LaBonne’s Markets, whose CEO says he sees the spike as an opportunity to burnish the four-store chain’s reputation for affordability.
Bob LaBonne Jr. told the trade journal Grocery Dive he’s going against the grain despite a probable adverse impact to his bottom line.
“As a smaller store, you have the image of being high-priced. So the last thing you want to do is confirm that by being overly aggressive on trying to get margins on items that are sensitive,” LaBonne said while pricing dozen-egg cartons at $3.99 at his outlet in Watertown, Conn.
“I would rather hold the price and [show] that we’re trying to take care of our customers and not get greedy,” he said, noting that his profit margins on eggs are currently between 10% and 15%, which is below the store’s overhead cost of about 18%.
#grocers #restaurants #hold #line #passing #soaring #egg #costs
Leave a Reply