FARMER'S TAKE

Price eggs-pectations

BY CHELSEA HILL
Posted 1/18/23

The new year comes with the hope that it will bring a fresh start, and a chance to get back on track and start new goals. But for producers large and small, it is a time to redetermine the market values of day-to-day goods.

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FARMER'S TAKE

Price eggs-pectations

Posted

The new year comes with the hope that it will bring a fresh start, and a chance to get back on track and start new goals. But for producers large and small, it is a time to redetermine the market values of day-to-day goods.

If you’ve perused the food aisles at the grocery store lately, you’ll have noticed everything seems to be climbing slowly but surely in price. There is one commodity that seems to have jumped to the fast lane: eggs. Local prices have spiked to upwards of eight dollars for a pack of 18 eggs. Normally eggs from local small producers are never lower in price than eggs in the supermarket, however, a combination of the right conditions resulted in the opposite effect. 

You see, large-scale egg producers are able to take advantage of the economies of scale, so they can sell eggs at a lower price to consumers. This means that although they may be raising millions of laying hens, the inputs to raise those hens are spread over those large numbers of birds, creating a larger price margin received per bird that’s more profitable than a smaller producer could get. 

Many larger commercial producers are also vertically integrated, meaning that they control many if not all the production stages and supply chains of their operations. 

For a long period of time, this helped them survive ever-changing market fluctuations. However, even these large growers can only absorb so much volatility within a market, until they are forced to increase their prices to customers, so they can stay in business.

When it comes to eggs, not only are producers in the industry facing inflation—as everyone else is—but they may have also had to face great losses and supply chain disruptions over the last few years, due to the effects of COVID-19. 

And there are the effects of the avian influenza outbreak this past summer. Remember that to replace laying hens, the fertilized eggs will need to be sourced outside the planned regular cycle. Once sourced, they must be incubated for 21 days, and then those chicks will take an average of 18 to 22 weeks to start laying. So it could take at minimum six months—more likely longer—to try and recover birds that were lost and to meet customer demand. 

And that’s on top of not having the income from those lost birds to help pay for raising the new birds. Another aspect of this is the price margin placed on eggs by the retailer, because their costs have increased, due to inflation. Plus, egg demand has increased too, so naturally, prices per dozen will increase. It’s the “perfect storm” to give us this jump in egg prices. 

Smaller local producers can also face these effects, but because they aren’t as affected by the overall market, their prices are determined individually—by the cost of production more than market prices. This has its benefits and detriments, but in this case, it’s a great benefit to local consumers, because you may be able to support a small farm while saving some money in the process. 

It’s this farmer’s take that now is the perfect time to seek out a relationship with your local egg farmer. You’ll not only support them, but will also support your own health and food security in these changing times.

market, prices, values, sales, commercial producers

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