Authors: Jinho Jung1 and Jayson Lusk2

 1 Post-Doctoral Research Associate, Center for Food Demand Analysis and Sustainability, Purdue University

2 Director, Center for Food Demand Analysis and Sustainability (CFDAS), Purdue University and Distinguished Professor, Head of Agricultural Economics, Purdue University

Egg prices have soared, hitting historically the highest level at $4.25 per dozen in 2022 (BLS, 2023). This is a 138% increase compared to December 2021, and the price spike exceeds the one experienced in 2015 when we last had a significant outbreak of Avian Influenza (Figure 1). The sudden rise in egg prices is creating a dent in household budgets for a couple of reasons: 1) U.S. households have increased consumption of eggs as a source of protein (USDA, 2022), and 2) egg demand is very inelastic. For example, a 1% price increase in the price of eggs would result in a 0.15% reduction in the quantity demanded by consumers (Lusk, 2023). Higher prices have also been accompanied with greater scarcity. The Center for Food Demand Analysis and Sustainability (CFDAS) at Purdue University conducts a monthly survey of over 1,200 consumers. From December 2022 to January 2023, there was a notable increase in the number of consumers who said they could not find eggs when grocery shopping (Figure 3).

Given the rapidly rising prices reported in Figures 1 and 2, many are wondering when consumers can expect relief. Unfortunately, the Bureau of Labor Statistics (BLS), which collects and reports price changes as a part of its effort to track economy-wide inflation, reports prices with a significant lag. BLS’s monthly price measures come with about a two-week lag from the reference month to the date on which the index is released (that is, the Consumer Price Index for January is released in mid-February) due to its process of collecting and calculating such measures (BLS, 2020).

Fortunately, new methods and approaches can provide more timely information. The Center for Food Demand Analysis and Sustainability scrapes information on grocery items every day from 20 online grocery store chains across 48 states in the U.S. from September 2022. These data can be used to gain a more up-to-date look on what is currently happening with retail egg prices. Figure 2 illustrates a comparison of prices for a dozen large and grade A eggs between BLS and CFDAS. CFDAS presents daily variations, while BLS reports monthly averages. The two-price series moves closely together. Our more recent data shows egg prices reached a plateau in January. Given a decline in the wholesale price of a dozen of eggs in January (USDA, 2023), retail egg prices will hopefully drop soon albeit a lag between a drop in wholesale and retail prices.

Line chart showing monthly U.S. prices for Grade A large eggs from January 2013 to January 2023. Prices remain near $2 per dozen from 2013 to 2015, spike to nearly $3 in 2016, decline below $1.50 by 2017, fluctuate between about $1.20 and $2.00 through 2021, then rise sharply in 2022, reaching over $4 per dozen by January 2023.

Line chart comparing daily prices for Grade A large eggs from September 2022 to January 2023 using two data sources. A dashed line representing BLS prices shows step-like increases from about $2.90 to $4.25 per dozen. A solid line representing CFDAS prices rises more gradually over the same period, increasing from about $3.40 in September 2022 to around $4.50 per dozen by January 2023, with short-term fluctuations between updates.

Two bubble charts compare foods consumers were unable to find when grocery shopping in December 2022 and January 2023. In December 2022, shortages are spread across items such as milk (7 respondents), eggs (6), cheese (6), meat (6), pasta (5), produce (5), and fresh items (5). In January 2023, eggs dominate shortages, reported by 50 respondents, followed by cheese (12), milk (8), chicken (7), stock, frozen foods, and general food items (6 each), with several other categories reported by five respondents. Bubble size represents the number of consumers affected.

ConsumerCorner.2023.Letter.07