Just as inflation cools, bird flu is driving up the price of eggs

Consumer prices only rose 2.9% annually in July, giving Americans hope inflation has stabilized. But the cost of eggs is back on the rise, far more than the rest of the grocery bill.

The price of a dozen eggs spiked 19.1% in July compared to the same month last year. Meanwhile, groceries as a whole only went up 1.1% annually in July.

Outbreaks of avian influenza, or bird flu, are largely behind the price surge. The USDA said more than 18 million birds have been affected by the bird flu, which has caused millions of chickens to be culled to prevent further spread.

"The tough part is, there's really no cure for bird flu, and even if there were, it would be so cost prohibitive," agriculture expert and host of "The Business of Agriculture" podcast Damian Mason told Straight Arrow News. "So prevention is really what these farms have to do."

"If you get bird flu in that building, you have to kill [or] cull off the entire barn, and that way it keeps the spread from going to the next barn, [and] the next barn, [and] the next barn," Mason said. "So that's a really tough situation."

The price of a dozen eggs is a full dollar more than it was last summer. That's still nearly $2 below recent highs when prices rose by 70% annually in January 2023.

But bird flu isn't the only thing making egg production more expensive . Labor and energy costs are also putting upward pressure on prices, Mason said.

"Those that want to show up and work at a chicken facility and go out and take care of hens and make sure the eggs are being gathered, washed, packaged into the crates; they're still a little bit hard to come by," he said. "[And] there's a big cost on energy. You look at what your energy bill has done even in your home. Well imagine now you're doing this across the whole entire supply chain. Eggs have to be refrigerated because they're a perishable product, so there's energy. They have to be transported in a pretty timely manner, so there's a lot of energy that goes into the price of eggs."

Egg demand is seen as " inelastic ," meaning people will generally still buy the same amount of the product despite price increases.

"When eggs double in price, you still want to feed your babies. You still want to make sure that your family has food, so they tend to be fairly inelastic," Mason said.

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