Egg prices fell for the first time in months. Will they get any cheaper?

Yahoo

13-05-2025

U.S. egg prices fell in April for the first time in months but remain high as a dozen Grade A eggs are still running consumers $5.12 on average.
The overall cost of eggs dropped 12.7% last month, according to the Labor Department's consumer price index. The drop represents the first month-to-month decline since October 2024. The series of price hikes over the last few months were related to the long-standing bird flu outbreak that impacted American poultry farms and egg-laying hens. The average price for a dozen Grade A eggs hit a record $6.23 in March.
"Considering that we were at record level prices just a couple of months ago, I think this is a pretty big move," said Bernt Nelson, an economist at the American Farm Bureau Federation. "We can't say that it'll necessarily stay this way, but for the near term, this is great."
Nelson attributes much of the price decrease due to farmers' collaboration with the U.S. Department of Agriculture to implement biosecurity, or measures taken to prevent the spread of bird flu, at their farms.
Eylem Senyuz, a senior investment strategy analyst at Truist said prices are down also because U.S. sellers are importing a higher number of eggs. Declining costs for energy and feed needed to heat and care for chickens also contribute to the decline, he said.
Changes in consumer behavior can also have an effect on prices. If a dozen eggs costs $6 and you're used to paying $2, you may stop buying eggs all together, resulting in less demand and eventually lower prices, Senyuz said.
White House spokesperson Kush Desai celebrated the decline in a statement Tuesday touting other news from the CPI report which also showed cooling inflation.
'The CPI report shows that the American people are experiencing real economic relief: grocery, gas, and egg prices are down, while real wages are up," Desai said. "President Trump's America First policies created a historic economy in his first term, and he's laying the groundwork to repeat the success in his second term.'
But are lower egg prices temporary or are they going to stick?
More: Egg prices are up. Is raising backyard chickens a better deal?
In April, the USDA still anticipated a significant rise in egg prices this year, predicting an increase as high as 54.6% in 2025.
Nelson said the USDA's prediction is partially based on an assumption that farmers will continue to struggle with bird flu.
However, "If things stay calm like they are now, we have a relatively low case load and that stronger biosecurity does its job and starts showing some success, we might see egg prices stay down," he said.
Multiple other factors including the rate of production will affect the price of eggs over the next few months. Even a peace-deal between Russia and Ukraine, two of the world's major grain producers could change egg prices for U.S. consumers, Senyuz said, because it could lower the cost of feed for chickens.
"By just looking at input prices, energy and agriculture, and the import process that has started, if I had to guess what the next month's number should be, it should be lower rather than higher," Senyuz said.
Ellen Kan, a partner at Simon-Kucher, said it's hard to tell where egg prices will be a few months from now because while there has been an effort to build back domestic supply, the sizes of egg-laying flocks are still significantly smaller than they were before bird flu outbreaks. She said the supply chain is not "meaningfully protected" in any way different from six months ago.
"We are still subject to any sort of volatility or major shocks to the supply system if there is another big outbreak," Kan said. "So, I'm not sure the solve is sustainable. We could get lucky and it could stick, but who knows?"
Changing tariff policy also adds to price uncertainty. High tariffs on eggs or anything that affects their production would likely mean cost increases, according to Senyuz and Kan.
Grocery prices overall dropped 0.4% in April, nearly offsetting a 0.5% rise the month prior. Other breakfast essentials also fell, with the price of cereal falling 2.5% and the cost of bacon declining 1%.
Other food staples did get pricier, including bread which rose 1.6% and fresh fish and seafood which increased 0.8%.
While the cost of groceries, on average, declined, the report found the price of dining out got more expensive and is up about 4% from the past year. The price of food away from home rose 0.4% in April, marking the third consecutive monthly uptick.
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This article originally appeared on USA TODAY: Egg prices dropped in April. Is the decline temporary?