Eggs are expensive. For bakeries and breakfast joints the pain doubles

If the price of a dozen eggs at the grocery store seems prohibitive, imagine cracking hundreds a day.

Diners, bakeries and other businesses that handle eggs by case, not dozens, say the impact of the spike in egg prices in the past year has been staggering.

“We pay $2,000 more a week than this time last year,” said Sam Turner, owner of Minneapolis’ Nicolette Diner, which brings in about $10,000 a day in revenue. “That can be very painful.”

Whether it’s omelets, scrambled eggs, meringues, or muffins, the high costs of eggs are commensurate with the prices customers pay.

“The price of eggs had a huge impact on us, and we had to raise menu prices,” Turner said. “We’re a small business. At this point, we’re losing a day of revenue every month” because of the higher cost of eggs compared to last year.

Turner said in January that he was paying about $25 for a carton of eggs — that’s 15 dozen. Now about $69.

The worst may be over for home cooks and commercial bakers alike. USDA data shows that egg prices have eased from their late-December peak with no indication that they will rise again soon.

But as with many consumer goods, prices that rise quickly are often slower to fall.

“The way we buy tends to boost prices that come down slowly,” said Mark Bergen, professor of marketing at the University of Minnesota’s Carlson School of Management. “If companies can get higher prices, they will hold onto that margin for as long as possible.”

We just have to shop [around] “Find the stores that lower prices faster, and find the producers who lower prices,” he added.

In December, the national average price for a carton of eggs sold in grocery stores was $4.11, and rose even higher later in the month, according to the USDA. Compare that to December 2021 when a carton cost an average of just $1.80.

Why do prices go up

Many factors can be blamed for the rise in egg prices: high demand early in the pandemic; not having enough workers, truck drivers, and whites to meet this growing demand; high costs of egg production operations; Avian influenza wipes out some commercial flocks and reduces supplies; and demand continues to rise as people cook more meals at home than in pre-pandemic times.

The price of eggs would drop faster if people stopped buying so many of them. But despite the grocery store shock and consumer complaints circulating on social media, eggs are a staple that often ends up on grocery carts, regardless of price.

“It’s a combination of good taste, high protein, and relatively inexpensive, and it’s a baking staple and a big part of our meals,” Bergen said. “When they tend to be more necessary, you can’t change them so easily,” there is less sensitivity to price.

Egg prices have also been relatively stable for decades, according to federal data, making any rapid changes even more noticeable.

The last big spike in egg prices was in 2015, when an outbreak of bird flu killed tens of millions of laying hens. But prices fell as quickly as they jumped.

Even as farms are resettled after the outbreak in 2022, there are more conditions — such as higher feed prices, labor shortages and difficulty getting goods to market — keeping prices higher for longer.

All of this puts more pressure on companies considering price increases or other changes.

The peak may have passed

For “cracking stock” — or the loose eggs primarily used by food manufacturers — prices have begun to fall, and the USDA reported Thursday that demand is “light to moderate.”

“There seems to be some relief on the horizon, and we’ll take what we can get,” Turner said.

The Honey & Rye Bakehouse in St. Louis Park pays $55 per case and has seen prices as high as $93—on top of the high costs of flour, butter, and milk. The bakery has managed to keep prices steady after increasing them in early 2022, but there are “no great solutions” for what comes next.

“This is really, really impacting our bottom line,” said Ann Andrews, owner of Honey & Rye, which runs through 900 eggs a week in its current slow season. “But there are minimum food prices—who’s going to pay $5 for a cookie?”

Where alternatives are available – such as pre-cracked liquid eggs or eggs Vegan alternatives – Prices aren’t much better. Some bakeries have had to produce fewer products.

Businesses largely have to wait out the storm.

“Whatever the price of eggs is, we’ll find out,” Andrews said.

Professor Yu Bergen said that this situation is key for companies and consumers for the foreseeable future. Even with inflation retreating from recent records, prices will likely continue to rise faster than they have typically for the past several decades.

“Learning to deal with inflation—to beat it, not fear it—is a good skill to develop,” Bergen said.

In the long term, Bergen said, persistently higher prices may force trade-offs for consumers and businesses, such as smaller portions or fewer offerings with less eggs: “How important are eggs in our diets and recipes?”

But the pendulum could swing back to lower prices before menu changes become permanent.

“The high demand and the high price is a reason to start investing in more birds,” he said. “Fundamentals suggest that there is reason to believe prices may decline.”

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