In an un-egg-spected turn of events, wholesale egg prices are falling. 

This is welcome news for consumers who miss the popular breakfast item or worry that Easter traditions may be skipped amidst astronomical egg prices. It’s just a matter of time before consumers see the price relief at the grocery store.

What’s driving this downward push on egg prices? Consumer behavior and wise public policy.

What’s Happening

Wholesale prices dropped 44% from their peak of $5.28 per dozen on February 28 to $4.83 per dozen Friday, according to Expana, which tracks agricultural commodity prices.

The Bureau of Labor Statistics finds that the price of a dozen large grade-A eggs hit a record high of $5.90 in February—and has nearly doubled from a year ago.

In some regions of the U.S., egg prices are much higher, but those wholesale prices are falling too (price for wholesale prices for Large, white, shell eggs):

  • Midwest region: down 11.3% to $7.47 per dozen 
  • California: down 9.4% to $9.48 per dozen.
  • New York: down 33% to $4.78 per dozen

Egg prices have a way to go to return to previous levels. According to the consumer price index (inflation measure) released last week, egg prices were up 10.4% last month and 58.8% from one year prior. Eggs were a driver in the overall inflation rate, but even these price increases are lower than the month prior, signaling they are going in the right direction.

Why are Egg Prices Falling Now?

Egg prices reflect the most basic economic principle of supply and demand.

The price of eggs skyrocketed after the supply dropped dramatically due to a widespread outbreak of bird flu last year. This disease is highly infectious and lethal among birds. More than 35 million birds have been killed in response to bird flu outbreaks in commercial flocks so far this year, according to the USDA’s figures. The Biden administration pursued a culling process that required killing chickens to prevent the spread of diseases.

Kevin Hassett, director of the White House’s economic council, told CBS News’ “Face the Nation”:

The Biden plan was to just kill chickens, and they spent billions of dollars just randomly killing chickens within a perimeter where they found a sick chicken.

The Trump administration has turned to increasing supply by importing more eggs, instead of culling chickens in the short term. 

In the long term, they want to use deregulation and preventive measures to expand supply, such as vaccinating chickens against new diseases.

In an op-ed, Agriculture Secretary Brooke Rollins explained: 

The Biden administration did little to address the repeated outbreaks and high egg prices that followed. By contrast, the Trump administration is taking the issue seriously. To that end, today I am announcing a comprehensive strategy to combat avian influenza. The Agriculture Department will invest up to $1 billion to curb this crisis and make eggs affordable again. We are working with the Department of Government Efficiency to cut hundreds of millions of dollars of wasteful spending. We will repurpose some of those dollars by investing in long-term solutions to avian flu, which has resulted in about 166 million laying hens being culled since 2022.

At the same time, consumers have pulled back on egg purchases, driving demand down. With lower demand and increasing supply, prices are forced to fall. 

What It Means for Me

Retail prices on eggs should begin to fall. Over time, as supply brings prices back down, we may see retailers also relax limits on egg purchases and restaurants remove surcharges on egg dishes.

Retailers like Trader Joe’s and CostCo imposed some limits on consumers’ egg purchases to manage supplies and stop hoarding.

National chain restaurants, such as the Waffle House, began charging customers an extra 50 cents per egg for each order. Other restaurants have also increased the cost of egg dishes for customers.

Bottom Line

With Easter on the horizon, falling egg prices are a blessing. 

Consumers will be encouraged to increase their egg consumption and as long as supply can keep up, we should not see upward pressure on prices. 

Demand and supply are powerful forces that impact our pockets. Policymakers must clear the way for businesses to ramp up production when the unexpected happens to keep inflation at bay.