Egg Suppliers Use Panic Shopping as an Opportunity to Jack Up Prices

March 25, 2020 Admin 0 Comments

Panic shoppers are stocking up on eggs, leading to shortages and higher prices

As the service industry flounders because of the coronavirus pandemic and subsequent stay-at-home orders, some businesses — like toilet paper and hand sanitizer production, or streaming services offering perfectly timed releases of documentaries about people who keep big cats as pets, for example — are booming. Among these successful sectors is the chicken egg industry wherein suppliers are raising prices, leaving retailers to either increase or absorb the cost.

“Egg sales increased 44 percent for the week ending on March 14 compared with a year ago, according to the most recent Nielsen data,” reports CNN business. Brian Moscogiuri, an egg analyst (real job!) and director at commodity market research firm Urner Barry tells CNN, “Consumers are panic shopping and, much like we see ahead of a snow storm, they are purchasing staple items (milk, bread, toilet paper, and eggs). Except obviously this is on a national scale and for a much longer period of time,” The report goes on to say that retailers are ordering “up to six times their normal egg volumes,” with some stores placing limits on the amount of eggs each customer is allowed to buy.

New York City grocery store Morton Williams has raised the price of eggs 14 percent to make up for its supplier reportedly doubling the cost of wholesale eggs, according to spokesperson Avi Kaner: “It is unconscionable that the egg industry has doubled prices because of increased demand. It is hitting low-income New Yorkers the hardest, as so many have lost their jobs working in restaurants and hotels.” CNN Business also reports a notice at a Boston Stop and Shop that reads, “Due to a limited supply and higher than usual demand, our suppliers have increased their prices on eggs. As a result, you may see higher prices starting Saturday, March 21, as well as potential interruptions in supply.”

According to a report by the USDA:

The wholesale price on the bellwether New York market for Large shell eggs delivered to retailers rose 52 percent (from $1.72 to $2.61 per dozen), doubling in the past two weeks with a continued higher undertone noted. The Midwest wholesale price for Large, white, shell eggs delivered to retailers increased 55 percent (from $0.94 to $1.46 per dozen) and the California benchmark for Large shell eggs was up 30 percent (from $1.76 to $2.28 per dozen) with both markets expecting continued sharp increases into next week.

It’s not exactly price gouging; more so it’s supply and demand, and the consequence of a free market economy. Egg inventory has indeed dropped (there can only be so many chickens, after all, even in the most horrendous factory farms), but not quite as dramatically as the prices are rising. “The overall inventory of shell eggs decreased 10 percent for the second consecutive week and the nation-wide inventory of Large eggs declined 14 percent in support of the current run on supplies at retail stores across the nation,” reads the USDA report. “...Total table egg production for the week was unchanged from last week and remains one percent above last year, about 1.8 million dozen.”

With shelter-in-place orders becoming more common across the U.S. and the approach of Easter, the demand for eggs — and the price — is only likely to rise.

• Egg prices are skyrocketing because of coronavirus panic shopping [CNN Business]
• Egg Markets Overview [USDA]