The spike in US egg prices has generated countless headlines in recent months. But how big a deal is this issue for consumers? To answer that question, we need to delve into data that you will rarely see in the media. As we explore the numbers, we find that overall food inflation is actually quite mild.
What's Happening with Egg Prices?
The wholesale price of eggs in the US market reached a record $8/dozen in late February, up 30% year-to-date and up a whopping 150% versus 12 months ago. No other agricultural commodity has increased so much in price over the past year. The other food products that are in the headlines—coffee and cocoa—are up ‘only’ 120% and 70%, respectively. As
shown in the chart, historically egg prices bounce around the $2/dozen level.
What's Driving Egg Prices Higher Right Now?
The culprit for the spike in egg prices is a severe outbreak of avian influenza virus H5N1, commonly referred to as bird flu, which is wreaking havoc on poultry farms. From December 2024 through February 2025, US farmers had to put down 37 million egg-laying hens—10% of the nationwide total. Fewer hens translates into less supply of eggs, hence the price spike.
The USDA is forecasting egg production to decline 1% in 2025, following a similar-sized drop in 2024. The first quarter of 2025 is expected to mark the trough in production and the peak in prices. As hen flocks gradually rebuild toward the end of 2025, prices should come down, but it will not be a perfectly smooth process. A bit of help may also come from increased egg imports, though the US is typically a net exporter.
We should note that the risk of bird flu infection in humans is low: CDC data shows that only 69 people have been infected across the US, nearly all of whom work in agriculture.
Is This Also an Issue for Chicken Meat?
The short answer is ‘no. ’ It may seem counterintuitive that chicken prices remain essentially stable, whereas egg prices have more than doubled over the past year. Here’s why: egg-laying hens are farmed separately from chickens raised for meat (which are called broiler chickens), and the latter have not been nearly as impacted by the latest outbreak. In fact, the USDA is forecasting broiler production to increase 1% in 2025, the same rate as in 2024.
How Much Do Consumers Spend on Eggs?
The US media continues to fixate on eggs as the prime case study of how consumers are experiencing inflation. The outsized coverage is giving a false impression about the magnitude of this issue. Here is the reality: while customers are seeing higher prices for eggs, Bureau of Labor Statistics data shows that eggs account for a mere 2% of the average grocery bill. It depends on individual food preferences, but as a rule of thumb, a four-person household with a monthly grocery budget of $1,200 might be spending $25 on eggs.
As shown in the chart below, which is derived from Bureau of Labor Statistics data, we show food price increases on a retail basis over the last year. It's important to note that what consumers pay at the store differs from wholesale prices due to markups for distribution, retail, and other factors, none of which are influenced by the bird flu. This explains why the egg price increase in the chart (+53%) is smaller than the wholesale metrics (~150%) mentioned earlier in the report.
What About Other Food Products?
As shown above, the price escalation in eggs truly stands out—nothing else is close, even coffee and candy (which also tend to be overhyped). Prices of other foods, many of which are more financially needle-moving, are stable or down versus 12 months ago. Breakfast cereal, for example, accounts for 2% of the average grocery bill, and it is 0.3% cheaper than a year ago. Likewise, milk, also 2% of the bill, is up a modest 1.8% from a year ago.
Putting everything together, the recently reported CPI data showed that overall food inflation stands at 2.5% y/y, which is slower than the aggregate CPI of 3.0%. Looking at eggs in isolation isn’t a useful approach, given that prices of everything else we eat are much more stable.
The Bottom Line
Inflation at the grocery store is a reality, and the bird flu’s impact on eggs is a unique situation. However, egg prices are not representative of overall food spending. Our view is that inflation should gradually decline as 2025 progresses, and food will be part of that trend—even if egg prices remain elevated.
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