Personal Finance

The hidden price of eggs: How high costs may trickle into other foods

Key Points
  • Retail egg prices are at record highs. That's largely due to a deadly and historic outbreak of bird flu in the U.S. in 2022.
  • High egg prices are likely feeding into the costs of some other foods that use eggs as a key ingredient, economists said.
  • That might include mayonnaise, baked goods and a host of other items.
  • Quantifying eggs' impact is difficult. But ingredients generally represent a small share of the prices consumers pay at the store.
Sutthichai Supapornpasupad | Moment | Getty Images

Consumers are paying record prices for eggs. But beyond the inflated sticker price for a dozen eggs, there's also a hidden expense to the soaring costs.

Elevated egg prices are trickling into food items across the grocery store — namely those in which eggs are a main ingredient, which might be anything from mayonnaise to baked goods like cookies and cake, according to food economists.

But eggs are an additive in a long list of other foods: Egg noodles, certain kinds of bread, custards, puddings, breaded or battered meat and vegetables, salad dressings, tartar sauce, marshmallows and some soup broths, for example.

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The impact of egg prices on other groceries is tough to quantify — but they've at least contributed to overall food inflation in recent months, economists said.

"It's part of why prices are higher across all kinds of foods," said David Anderson, a professor and food economist in the Department of Agricultural Economics at Texas A&M University.

Eggs are likely also propping up the costs of dining out, to the extent restaurants use eggs as an ingredient in their dishes, Anderson said.

Why egg prices are so high

A dozen large Grade A eggs cost consumers $4.25 in December, on average — a record high and more than double the $1.79 from a year earlier, according to monthly U.S. Bureau of Labor Statistics data.

The average price for all types of eggs ballooned 60% in 2022, according to the consumer price index. Their prices rose faster than almost any other good or service, in a year characterized by historically high inflation.

For context, grocery prices as a whole rose 12% in 2022 — about five times slower than those of eggs. Restaurant meals jumped about 8%. Food inflation peaked in August at a rate unseen since the late 1970s.

Higher egg prices are largely the result of a deadly outbreak of bird flu in the U.S., economists said.

The disease — known as highly pathogenic avian influenza — killed a record number of birds. Outbreaks, which usually dissipate by summer, continued into the second half of the year and coincided with peak seasonal consumer demand for eggs around the winter holidays.

Since February 2022, bird flu killed more than 44 million hens in commercial table-egg-laying flocks, according to the U.S. Department of Agriculture.

The impact of bird flu on a farm can persist for months. Farms generally must cull their flocks to prevent disease spread, then sanitize and restock their facilities. Additionally, it takes four to five months for a young hen to reach peak egg productivity, the USDA said.

This process played out nationwide, significantly disrupting egg production and leading to higher prices.

"It's an acute supply shock," David Ortega, associate professor in the Department of Agricultural, Food and Resource Economics at Michigan State University, said of bird flu.

Wholesale prices have fallen by over 50% from their December peak, but it takes a while for those price dynamics to reach consumers.

No 1:1 relationship between eggs, other food prices

There are many different types of egg products beyond a whole table egg. Food processors may use other forms in their end product: liquid whole eggs, liquid yolks, liquid whites and dried varieties of each, for example.

"Egg ingredients supply more than 20 functional benefits to food formulators and can play a critical role to achieve proper form, function, appearance, taste, texture and shelf life," the American Egg Board said.

Food labels don't necessarily label "eggs" as an ingredient. Sometimes, "albumen" may be used to refer to an egg white, or "livetin" to refer to part of an egg yolk, said Amy Smith, a food economist at Advanced Economic Solutions.

It's part of why prices are higher across all kinds of foods.
David Anderson
professor and food economist at Texas A&M University

Prices have risen beyond table eggs, too. The wholesale price for dried whole eggs is up nearly threefold in the past year, to $10.25 per pound from around $3.90, according to Urner Barry, a market research firm.

But there isn't a one-to-one relationship between higher egg prices — whether shelled or in another form — and the cost of other foods.  

On average, about $0.15 of every dollar a consumer spends on food can be tied back to the farm (i.e., the actual cost of the ingredients), Ortega said. The share may be higher or lower depending on the food.

The majority of consumer cost is attributable to things that occur outside the farm, including processing, transportation, packaging and price markups at the wholesale and retail levels, Ortega said.

In short: Eggs are one of many factors in inflated consumer food prices.

Here's why eggs cost so much
Here's why eggs cost so much

"I definitely think tight egg supplies are leading to general food inflation," said Walter Kunisch, senior commodities strategist at Hilltop Securities. "But how much and what percentage ... is difficult to ascertain."

Take mayonnaise, for example. The consumer price index category that contains mayonnaise — "other fats and oils including peanut butter" — was up 18% in 2022.

But vegetable oils — such as sunflower, canola and soybean oils — are also a main ingredient in mayonnaise. Prices for those oil commodities soared in 2022, partly due to Russia's invasion of Ukraine and other supply shocks among major global producers. It's difficult to untangle how much of the annual increase was due to eggs versus oils or other factors, Kunisch said.

Similarly, flour prices jumped more than 23% last year — again due largely to the war in Ukraine, which is a major wheat exporter, as is Russia. Flour prices — along with those for eggs — helped raise cake, cookie and cupcake prices, which jumped by 17% in 2022, according to economists and CPI data.