Egg Prices are at a Lowest in a Decade in Richmond and U.S.
Jul 9, 2017
Now might be the time to try out that new cake recipe or start cooking omelets for breakfast every morning: Egg prices in the Richmond area, and across the country, are at the lowest in a decade.
The average price for a dozen Grade A large eggs in the Richmond region was 76 cents in June, down 12.4 cents from May and down 67.6 cents from June 2016, according to the Virginia Department of Agriculture and Consumer Services’ monthly Market Basket survey of supermarkets.
The lower prices are a reversal from two years ago, when egg prices locally and nationally skyrocketed to nearly $3 a dozen as an avian influenza, or bird flu, forced farmers to destroy millions of birds.
Since then, egg prices have dropped about 52 percent to a national average of $1.41 per dozen in May, the lowest for that month since 2006, according to the Bureau of Labor Statistics.
The market has too much supply and not enough demand, said Hobey Bauhan, president of the Virginia Poultry Federation, a trade association that represents all sectors of the poultry industry, including farmers and processors.
“It’s a difficult time for producers, but it is a great time for consumers to enjoy eggs at an extremely affordable price,” Bauhan said.
After the avian flu outbreak, egg producers expanded production. Many overexpanded, he said.
The egg market has “had a significant expansion in the last two years,” Bauhan said. “Supply has exceeded demand” and “pushed prices downward.”
In the Richmond area, prices for a dozen large eggs on Sunday were 49 cents and 79 cents at two Kroger stores; 59 cents at the two area Wegmans stores; 89 cents and 99 cents at two Food Lion stores; 50 cents at a Walmart Supercenter; 58 cents at a Walmart Neighborhood Market; and 59 cents at one Aldi store.
The lower prices at the two Wegmans stores also might be caused by competition, said Ron Indovina, the Rochester, N.Y.-based chain’s category merchant.
The Richmond-area grocery marketplace is highly competitive, thus causing chains to lower prices, he said. Wegmans prices its items based on competition as opposed to demand or cost, he said.
Some area restaurants are also seeing lower egg prices.
For instance, Phil Freeman, executive chef at the District 5 restaurant on West Main Street in Richmond, has noticed a “considerable difference” in the price of eggs in recent months.
“The price since December has dropped about $2 per 15 dozen,” said Freeman, who has “not noticed any change in quality or presentation,” just lower prices.
Supplies of eggs in the U.S. are expected to increase more this year, and the government predicts egg costs will drop more than any other food group in 2017.
Total egg supplies in the U.S. are expected to climb 1.3 percent in 2017 to 8.829 billion dozen, the U.S. Department of Agriculture said in a report last month. That’s the highest in data going back to 1992.
Output is projected to rise again next year, with total supplies forecast at 8.957 billion dozen, the USDA estimates. The vast majority of supply is domestically produced.
One bright spot for producers is that demand is expected to pick up before the end of the year.
Summer is not the most popular season for egg usage, said Bauhan, with the Virginia Poultry Federation. The spring and the holiday baking seasons in November and December generally generate the most demand for eggs, he said.
The egg business is “a cyclical situation,” Bauhan said. Bauhan noted that over the past few years, “per-capita egg consumption is steadily increasing.” Consumption is likely increasing because consumers are learning more about the nutritional benefits of eggs, he said.
Adding a further drag on prices, the industrywide move to increase cage-free production is limiting farmers’ ability to trim flocks.
By 2050, as much as 75 percent of output will be cage-free, up from about 14 percent now, according to estimates from Advanced Economic Solutions.
“A large portion of U.S. retailers have committed to sourcing cage-free eggs in the next few years,” Bauhan said. “However, producers that have started moving to cage-free production facilities are finding that the current, real demand for cage-free eggs significantly lags the current supply, which adds to the downward pressure on the commodity egg market prices.”
But Bauhan said Grade A egg prices may return to more normal levels soon.
“It does seem to be leveling out,” he said.
email@example.com, (804) 649-6349, Bloomberg News contributed to this report.
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