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Why the price of eggs spiked so high in the span of one year

AILSA CHANG, HOST:

Across the country, the high price of eggs has people scrambling. Get it? Sorry, sorry, sorry. Seriously, though, in December, the cost of eggs was up 60% over the previous year, according to the Consumer Price Index. Kendall Crawford of Harvest Public Media explains what's behind the increase.

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KENDALL CRAWFORD, BYLINE: When you walk through the doors of the Sugar Shack Bakery in Sioux City, Iowa, the smell hits you right away, and people line up to order from the assortment of cakes and cookies on the shelves.

UNIDENTIFIED PERSON: All right, two caramels and two red velvet - perfect.

CRAWFORD: To make each sweet-smelling treat, it takes a whopping 300 eggs every two to three days. Lately, that's meant a much higher bill for Claudia Hessa, the bakery's owner. She says she's been spending more than double on them, and she can't double or triple sales to make up for it.

CLAUDIA HESSA: You just can't. You wouldn't - you'd be out of business. So it's like, yeah, what do you do?

CRAWFORD: The U.S. Bureau of Labor Statistics says the average costs for a Grade A large carton of eggs last month was $4.25. In California, the average retail price is now around $7. And in the Midwest, January wholesale prices shot above $5, according to the USDA. Pat Westhoff is director of the Food and Agricultural Policy Research Institute at the University of Missouri. He says egg prices are typically more volatile than other food commodities.

PAT WESTHOFF: OK, so a pretty big increase in price to convince people not to buy quite as many eggs. So a relatively modest percentage decline in production has resulted in a very large percentage increase in prices.

CRAWFORD: And that shrinking supply is the result of a deadly bird flu, says analyst Maro Ibarburu of the Egg Industry Center.

MARO IBARBURU: We lost 44 million laying hens last year because of avian influenza, so that really creates a reduction on the number of eggs that can be produced.

CRAWFORD: And 2022 marked one of the virus's deadliest outbreaks, which helped keep the prices high.

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QUANECIA FRASER: New at noon, a disaster proclamation is issued for a county in northwest Iowa over the bird flu. The proclamation from Governor Kim Reynolds...

CRAWFORD: When the virus is detected in one bird, federal law requires that all remaining birds be culled to keep the highly pathogenic virus from spreading. Last March, one of the country's biggest egg producers, Rembrandt Enterprises, had to cull a flock of more than 5 million hens. And major bird losses continued throughout September, right before winter, when eggs hit peak demand. At the Hy-Vee grocery store in Sioux City, the price of eggs made Lisa Gonzoli (ph) decide not to buy any.

LISA GONZOLI: No. It's just ridiculous.

CRAWFORD: She says when she started having to pay more than $5 for a dozen, she considered excluding them from her grocery list entirely.

GONZOLI: But we're having a baby shower this weekend, and we need more eggs. So my daughter's in-laws are coming down from Minnesota, and they're bringing three dozen eggs from the farm.

CRAWFORD: That way, she can save and still bake for her guests. But even if you don't have an in like Gonzoli, relief may be coming soon. The USDA is forecasting better days, a 30% drop from some of the highest prices. So if bird flu doesn't cause another disruption, buyers could be shelling out a little less next season. For NPR News, I'm Kendall Crawford in Sioux City. Transcript provided by NPR, Copyright NPR.

Kendall Crawford