Egg prices have been hitting record highs daily due to a sharp decline in supply caused by the spread of avian influenza (AI), raising concerns about "eggflation" (a combination of eggs and inflation) to their peak.

According to the Associated Press and the U.S. Department of Labor on the 17th, the national average retail price for a dozen eggs reached $4.95 in January, a 15.2% increase from the previous month. Compared to a year ago, prices have risen by 53%. This is about 2.5 times higher than the lowest price of $2.04 recorded in August of last year.

Additionally, the price has surpassed the previous record high of $4.82 set in January 2023, when egg prices soared due to the spread of avian influenza.

However, in many regions, including Southern California, consumers are paying well over $10 for eggs, with specialty eggs like organic and free-range eggs being even more expensive.

The sharp rise in egg prices represents the largest increase since the 2015 avian influenza outbreak in the U.S. and accounted for about two-thirds of the increase in food prices last month. With little expectation of prices dropping in the short term, consumers are likely to face continued financial strain. Typically, egg prices tend to rise further as demand spikes ahead of Easter. The U.S. Department of Agriculture (USDA) predicted last month that egg prices would rise an additional 20% this year.

The primary cause of the price surge is the ongoing spread of avian influenza in the U.S. and the resulting large-scale culling of poultry. When a virus is detected on a farm, the entire flock is culled to prevent the disease from spreading. Large farms house millions of chickens, so an avian influenza outbreak at even one major farm can significantly impact supply.

According to the Wall Street Journal (WSJ), approximately 158 million chickens and ducks have been culled nationwide since the 2022 avian influenza outbreak. Last month alone, over 23 million birds were culled, and 18 million were lost the month before. Most of the culled birds were egg-laying hens, leading to an absolute shortage of laying hens and a sharp decline in egg supply.

Other factors are also driving up egg prices. Egg farmers are facing rising costs for feed, fuel, and labor, as well as significant expenses for biosecurity measures to prevent avian influenza. When an outbreak occurs on a farm, it takes several months to cull and disinfect facilities, and then to restock and resume egg production, further exacerbating the supply shortage.

Currently, 10 states require that only cage-free eggs be sold. However, cage-free egg production is concentrated in specific regions, such as California, making prices more volatile when outbreaks occur at cage-free farms. In fact, most recent outbreaks have been at cage-free farms in California. States that have already implemented cage-free egg mandates include California, Massachusetts, Nevada, Washington, Oregon, Colorado, and Michigan.

As the situation worsens, Kevin Hassett, Chairman of the White House National Economic Council (NEC), appeared on CBS's "Face the Nation" on the 16th and stated that he, along with Agriculture Secretary Brook Rollins, plans to present a response plan for avian influenza to President Trump next week.

Meanwhile, the Trump administration is facing criticism for laying off personnel responsible for avian influenza response as part of government restructuring.

According to a report by Politico on the 16th, 25% of employees at the USDA's National Animal Health Research Network Program Office were laid off as part of the Trump administration's large-scale federal workforce reduction. This office coordinates the work of 58 research institutes nationwide that respond to avian influenza. Although it has only 14 employees, it plays a critical role in preventing the spread of animal diseases, Politico explained.

The sharp rise in egg prices is fueling inflation concerns and negatively impacting the broader economy.

The U.S. Department of Labor reported that the Consumer Price Index (CPI) rose 3.0% year-over-year in January, driven by increases in energy and food prices. This marks the first time in seven months, since June of last year (3.0%), that the CPI has risen above 3%.



<Hwandong Cho>