A Shortage of Eggs and Rising Grocery Costs
On the Sunday before Thanksgiving, a grocery store in Rochester, Minnesota, ran out of eggs. Meanwhile, in Richfield, an hour and a half away, eggs were available but at a steep price—40% higher than just four months ago.
In November, egg prices jumped 8.2% nationwide, one of the largest monthly increases in two decades, according to recent Consumer Price Index data. Other staples like beef, coffee, and orange juice have also seen sharp price hikes.
Factors Driving the Spike
Egg Prices Soar Due to Bird Flu
A bird flu outbreak has severely impacted egg supplies, just as holiday baking and dining out are at their peak. Wholesale egg prices surged nearly 55% last month, with retail prices following suit.
Beef Supply Hits a 70-Year Low
The US cattle inventory is at its lowest in over 70 years, driven by drought and rising production costs. Experts expect the contraction to continue through 2025, with beef cow herd expansion unlikely until 2026 or later.
Orange Juice Impacted by Weather and Disease
Frozen orange juice prices are up 17.2% annually, driven by hurricanes, drought, and citrus greening disease in Florida and Brazil. Brazil, a key supplier to the US, experienced its worst orange harvest in decades.
Coffee Prices Brew Up
Adverse weather in Brazil, the world’s largest coffee producer, has disrupted Arabica bean production. Prices reached a record $3.44 per pound, and climate change threatens to make coffee production more challenging in the coming years.
Chocolate Costs Double
Cocoa prices have skyrocketed by 108.7% annually due to poor weather in West Africa, which produces over 70% of the world’s cocoa. Candy manufacturers have responded with smaller products, recipe changes, and shifts toward non-chocolate items.
Inflation’s Lingering Effects
Although these price increases are driven by specific events, they hit harder after years of high inflation. Grocery prices are now 27% higher than they were in February 2020. For example:
- Eggs: Up 81% in four years
- Margarine: Up 55%
- Beef and Veal: Up 37%
- Juices: Up 32%
Despite a slowdown in overall inflation, economists caution that food prices are unlikely to return to pre-pandemic levels.
Consumer and Business Responses
Consumers are stretching their budgets by seeking deals and substitutes. Businesses, like Vidlak’s Brookside Cafe in Omaha, Nebraska, are also adapting.
Restaurant owner Roger Vidlak has seen the cost of a 15-dozen case of eggs jump from $18 to $75. To manage costs, he switched to cage-free eggs and liquid egg mixes, which are less impacted by the bird flu.
“I haven’t raised my prices in six months,” Vidlak said. “I absorb the costs because I value my loyal customers.”
Looking Ahead
While some price increases are temporary, others, like those driven by climate change and labor shortages, could persist. Stabilization, not price drops, is the best-case scenario for most consumers and businesses.
In the face of these challenges, experts recommend smart shopping, exploring alternatives, and staying informed about the latest economic trends.
