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Eggs are expensive. For bakeries and snack bars, the pain is multiplied

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If the price of a dozen eggs at the supermarket seems high, imagine breaking hundreds a day.

Snack bars, bakeries and other businesses that sell eggs by the box, not the dozen, say the impact of last year’s egg price hike is staggering.

“We’re paying $2,000 more a week compared to this time last year,” said Sam Turner, owner of the Nicollet Diner in Minneapolis, which generates about $10,000 in revenue a day. “That can be very painful.”

Whether in omelettes, meringues, meringues or cakes, the higher costs of eggs are being incorporated into the prices paid by customers.

“Egg prices had a huge impact on us and we had to raise our menu prices,” Turner said. “We’re a small company. At this point, we’re losing a day of revenue every month” due to the higher cost of eggs compared to the previous year.

Turner said last January that he was paying about $25 for a case of eggs — that’s 15 dozen. It’s now about $69.

The worst may be over for home chefs and commercial bakers. Data from the US Department of Agriculture show that egg prices have retreated from their late-December peak, with no indication that they will rise again any time soon.

But, as with many consumer goods, prices that rise quickly tend to fall more slowly.

“The way we buy tends to reinforce prices that are slowly falling,” said Mark Bergen, professor of marketing at the Carlson School of Management at the University of Minnesota. “If companies can get higher prices, they’ll keep that margin as long as they can.”

“We only have to buy [around] more,” he added, “by finding the stores that are dropping prices the fastest and finding the producers who are dropping prices.”

In December, the national average price of a carton of eggs sold in supermarkets reached $4.11, rising even more later in the month, according to the USDA. Compare that to December 2021, when a box averaged just $1.80.

Why are prices soaring?

Many factors are responsible for rising egg prices: high demand at the start of the pandemic; insufficient workers, truck drivers, and eggs to meet this increased demand; higher costs for egg operations; bird flu wiping out some commercial flocks and reducing supplies; and continued high demand as people cook more meals at home than they did in pre-pandemic times.

The price of eggs would drop faster if people stopped buying so many of them. But despite the shock of supermarket etiquette and consumer complaints that dot social media, eggs are a staple and often end up in grocery carts, no matter the price.

“It’s a combination of great taste, high protein, relatively inexpensive, a bakery staple, and a huge part of our meals,” Bergen said. “When it tends to be more of a necessity, one that you can’t easily change,” there is less price sensitivity.

Egg prices have also been relatively stable for decades, according to federal data, which makes any quick changes more noticeable.

The last big spike in egg prices was in 2015, when an outbreak of avian flu killed tens of millions of laying hens. But prices fell almost as quickly as they soared.

Even with the restocking of farms after the 2022 outbreak, there are many more circumstances – such as high feed prices, labor shortages and difficulty getting goods to market – keeping prices higher for longer.

Which leads to more stress for companies contemplating more price increases or other changes.

Peak has possibly passed

For “breakout stock” – or bulk eggs used primarily by food manufacturers – prices have started to drop, and the USDA said on Thursday that demand is “mild to moderate”.

“There appears to be some relief on the horizon, and we’re going to take what we can,” Turner said.

Honey & Rye Bakehouse in St. Louis Park is paying $55 per case and has seen prices reach $93 – in addition to the higher costs of flour, butter and milk. The bakery has managed to keep prices steady after raising them in early 2022, but “there are no big solutions” for what comes next.

“It really affects our bottom line,” said Anne Andrus, owner of Honey & Rye, which produces 900 eggs a week in its current slowest season. “But there’s a cap on food prices – who’s going to pay $5 for a cookie?”

Where substitutes are available – such as pre-cracked liquid eggs or vegan alternatives – the prices aren’t much better. Some bakeries had to make fewer products.

For the most part, companies just have to wait out the storm.

“Whatever the price of eggs is, we’ll find out,” Andrus said.

U professor Bergen said attitude is critical for businesses and consumers for the foreseeable future. Even with inflation retreating from recent records, prices will likely continue to rise faster than they have in recent decades.

“Learning to deal with inflation – navigating it, not fearing it – is a good skill to develop,” Bergen said.

In the longer term, Bergen said persistently high prices could force trade-offs for consumers and businesses alike, such as smaller portions or less egg-heavy offerings: “How important are eggs in our diets and recipes?”

But the pendulum could swing back to low prices before the menu changes become permanent.

“The high demand and the high price are reasons to start investing in more birds”, he said. “Fundamentals suggest there’s reason to think prices could fall further.”

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