Food & Climate
In November, egg prices shot up by 8.2% nationwide, logging one of the highest monthly spikes in the past two decades, according to American Consumer Price Index data released last week. The “egg-flation” was not only, shoppers have seen jumps in beef, coffee and non-alcoholic beverages, driving up overall grocery prices to their largest monthly gain since January 2023.
And more increases appear to be coming down the pike for the pulped-paper-packed protein: Wholesale prices for chicken eggs soared by nearly 55% last month, and wholesale food prices rose by 3.1% (their highest monthly increase in two years), according a report seen by “Food & Climate” platform.
The “egg-flation” and sudden price hikes
Economists say not to panic. The “egg-flation” and sudden price hikes in some major food categories are reflections of isolated incidents rather than something systemic and indicative of a reacceleration of inflation.
That doesn’t make it any easier to stomach, however, for Americans worn down by years of prices rising much faster than they typically do.
“Overall grocery price inflation is relatively tame; it’s essentially in line with where it was before the pandemic … nothing alarming,” said Gregory Daco, EY Parthenon’s chief economist. “But prices relative to where they were before the pandemic remain very high.”
Even before “inflation” became a household word, food prices have long been subject to fluctuations as the result of weather events, crop yields, disease, war, supply chain snarls, spikes in demand or other temporary disruptions.
And that’s what’s happening here with eggs (and beef and coffee and orange juice).
A bird flu outbreak is ravaging flocks across the country, reducing the supply at a time when Americans are in festive moods and baking, cooking and dining out more.
The USDA in December further revised down US egg supply estimates and raised price forecasts for 2025.
Vidlak’s Brookside Cafe in Omaha, Nebraska, has served up breakfast and lunch for 28 years, but is getting squeezed by rising costs of the critical ingredients. Founder Roger Vidlak said he’s doing everything he can to not pass those costs along to customers.
“Recently, the eggs have been ridiculous,” Vidlak said, over the cacophony of sounds during a bustling Friday. “Six months ago, you could get a case of them for $18 to $20. For a 15-dozen case now, they’re up to $75.”
But he found some workarounds. In addition to staying on top of weekly price checks, Vidlak turned to cage-free eggs, which have been less impacted by the avian flu and are considerably cheaper — as are liquid egg mixes.
US cattle inventory
US cattle inventory is at the lowest level in more than 70 years, according to the American Farm Bureau Federation. Driven by drought and other rising costs, the contraction is expected to continue through 2025 as dry conditions persist.
US beef cow herd expansion is not expected to start until 2026 or 2027, according to a CoBank report released last week.
And frozen non-carbonated juices tell the starkest tale for a beverage category that was walloped by hurricanes, bad weather and a citrus disease. And the future may be looking even bleaker for orange juice as Brazil — which supplies about 30% of America’s imported OJ — had its worst harvest in decades because of flooding, drought and citrus greening disease.
Although parts of the food industry are seeing cost increases because of specific reasons, those price spikes just hit differently these days — especially when they’re simultaneous, according to “CNN”.
Through November, grocery prices were up 1.6% from the year before, according to the latest CPI report. That annual rate is trending below overall inflation (which accelerated to 2.7% last month) and landed at an average seen during 2008-2019, Bureau of Labor Statistics data shows.
The annual rate of grocery price inflation is the highest since this time last year; however, it’s a far cry from 2022 when it averaged 11.4% and peaked at 13.5% — well above overall inflation’s peak of 9.1%.
That breakneck pace resulted in grocery prices being 27% higher now than they were in February 2020, before the onset of the pandemic in the US. And some categories had it far worse than others during that time span: Eggs are up 81% in the past four years, margarine is up 55%, beef and veal are up 37%; and juices are up 32%.
Donald Trump, last week, said he hoped to bring down grocery prices by drilling for more oil domestically, which in turn could bring down gas prices and transportation costs.
Economists and food industry experts say it’s not that easy. Food manufacturers have expanded their footprint across the country to cut down on miles, and a lot of the increase in transportation costs has been because of driver shortages.