Here’s why the price of eggs increased in 2022. According to experts, these increased prices might last into the first quarter of 2023.

• According to the consumer price index, the price of eggs increased by 49% in the previous year, more than any other supermarket item.
• The main offender, according to economists, is bird flu. The deadliest avian flu outbreak in American history occurred in 2022 and caused the deaths of millions of egg-laying hens.
• Chicken prices have been dropping, which may seem paradoxical. According to economists, chickens bred for meat consumption are less susceptible to bird flu.

In a year when Americans saw their grocery store expenses soar, the rise in egg prices stood out.

According to the consumer price index, a measure of inflation, average egg prices increased by 49.1% in November from a year earlier. This was the most significant yearly percentage increase of all supermarket goods during that time.

Comparatively, the broad “food at home” category saw a 12% increase.

According to figures from the Federal Reserve Bank of St. Louis, the price of a dozen big, Grade A eggs more than doubled to $3.59 in November from $1.72 the previous month, making the spike much more pronounced.

The primary cause of increased egg prices is bird flu.

Economists claim that this year’s most deadly avian flu outbreak in the United States, which has killed millions of egg-laying hens, is mostly to blame for the price changes.

Mr Lapp, president of Advanced Economic Solutions, a food economics consulting firm, previously stated to CNBC, “Lots of things are up since 2020.” However, the most recent increase is extraordinary in egg-product and shell-egg markets.”

According to data from the USDA, as of December 28, 2022, avian flu affected approximately 57.8 million birds. Ducks and turkeys are included in these figures.

According to the CDC and Prevention, the most recent bird flu outbreak occurred in 2015, affecting 50.5 million birds, the previous record. Bird flu is relatively uncommon in the United States.

Lapp stated that the flu hadn’t appeared for at least two or three decades prior to that.

Why this is important: In October, the New Jersey Department of Agriculture stated that avian flu is “highly contagious.” Additionally, it is very deadly: The CDC says that it kills 90% to 100% of chickens within 48 hours.

According to Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an Irvine, California-based egg supplier, who previously spoke with CNBC, farmers typically must kill their remaining birds—not by choice but rather as a result of federal rules designed to prevent the spread.

According to Moscogiuri, the avian flu has resulted in the deaths of approximately 40 million egg-laying hens—known as “layers” in the industry. The USDA reports that there were 375 million total layers in the United States as of December 1, a 5 percent decrease from last year.

The number of eggs has decreased in tandem. Around 8.9 billion eggs were created in November, down from 9.7 billion in December 2021, as per USDA information given on December 20.

Moscogiuri stated, “It’s a supply disruption, ‘an act of GD stuff.” He described the circumstance as “unprecedented.”

He continued, “It’s coincidental that inflation is going on [more broadly] during the same period.”

According to experts, bird flu typically appears during migration in the spring and vanishes by summer. However, this year was unique; September saw a reemergence of the virus.

In October, the USDA reexamined its creation gauge for table eggs descending for 2023 and the rest of 2022 following “September discoveries” of bird influenza.

That outbreak of the avian flu, which has resulted in the deaths of egg-laying hens, is smack dab in the middle of peak demand. According to experts, consumers typically purchase more eggs now for holiday baking, for instance.

In an October outlook report, the USDA suggested that a shift away from some higher-priced proteins amid broader food inflation has also boosted demand for eggs.

According to the Consumer Price Index (CPI), egg prices increased by 10.1% in October and 2.3% in November alone.

According to Lapp, the increased cost of eggs “could last into the first quarter of the new year 2023.”

Moscogiuri, on the other hand, says that price pressures appear to be going down. That may be partly because demand naturally decreases after the holidays. He also noted that record egg prices harmed demand.

Moscogiuri stated, “The market has now reached its peak, and spot prices are increasingly negotiable.” The market will follow suit as the spot price falls, and we can anticipate a 25% to 30% fall from the current all-time highs.

“This adjustment will probably happen in the next three weeks.” He added that any additional large bird flu outbreaks could alter this trend.

Maybe illogically, chicken costs have been declining as of late, moving inverse those of eggs.

As per CPI information, chicken costs recoiled in October and November, falling by 1.3% and 0.8%.

The “layers” and the “broilers,” chickens raised for meat consumption, are not affected by avian influenza to the same degree.

Moscogiuri stated, “It’s two different styles of production and two different breeds of bird.”

According to Vencomatic Group, a poultry consulting firm, a broiler’s life cycle is significantly shorter—from hatching to slaughter, it can take anywhere from 5.5 to nine weeks.

Moscogiuri stated that an egg-laying hen’s cycle could last more than 100 weeks. The USDA says that layers can take five to six months to reach total productivity. According to experts, farmers must keep the latter alive for longer, making them more vulnerable to bird flu.

The increased number of broilers also contributes to lower grocery store prices for chicken.

According to the USDA, 851 million broiler chicks were hatched in October, a 5% increase from the previous year. The number in August (865 million) surpassed a previous monthly record set in March 2020.

According to data provided by the government, “production” of broilers, as measured by total pounds of meat, will increase by 2% in 2023 compared to 2022.

Chicken prices are still up 12% compared to October 2021, according to the Consumer Price Index (CPI). Chicken and egg prices have likely risen due to rising costs of commodities like corn and soybeans, which are used to feed chickens. Food distribution costs, for instance, are also impacted by rising annual energy costs.