According to a report from the United States Department of Agriculture (USDA), the price of eggs in California has significantly increased in the past month due to highly pathogenic avian influenza (HPAI) and other issues affecting farms across the state and the nation.
As of January 3, the price of a dozen large white eggs in California had risen to around $8.97, a 70% increase from the $5.28 at the end of November.
In recent weeks, multiple counties in California, including Butte, Merced, Riverside, Sacramento, San Joaquin, El Dorado, Monterey, Tulare, Kern, Fresno, and Stanislaus, have reported cases of avian influenza.
As of January 6, 19 commercial chicken flocks and 3 backyard flocks in California have been affected by the epidemic, involving a total of 4.6 million chickens.
Farmers are working hard to adapt to the market conditions. Frank Hilliker, the owner of Hilliker’s Ranch Fresh Eggs in San Diego County, has started limiting the number of eggs customers can purchase to manage the supply.
Hilliker said, “As egg farmers, we are doing everything we can to mitigate the impact of avian influenza.”
With around 30,000 laying hens, Hilliker has had to raise prices from $3 a dozen to $4.50 to meet the growing demand from his farm and to supply restaurants and grocery stores.
“There are many loyal customers coming to us because they want fresh eggs,” he said. “We are working hard to help everyone who wants to buy eggs.”
Hilliker mentioned that he could close the farm store and sell all the eggs to stores and restaurants at over $8 a dozen, but he values direct sales to the public. His customers include fixed-income elderly individuals and families.
Grocery stores are also adapting to the current market conditions. Francisco Hernandez, the manager of Krisp’s Market in the Golden Hill community of San Diego, noted a decrease in egg demand in his store due to the higher prices.
“Our expenses are now more than double what they used to be,” Hernandez told a media outlet, explaining that he used to buy 18 crates of eggs per week, but now only buys 7 crates every two weeks or less.
Brian Earnest, Chief Economist of Animal Protein at CoBank, stated that egg prices may continue to rise until the market adjusts.
Earnest mentioned that the egg market in California faces a series of unique challenges that have led to price increases, and until these challenges are mitigated, the costs of producing and purchasing eggs in California will remain high.
Earnest acknowledged the role of HPAI outbreaks in driving up food prices. He noted that these intermittent outbreaks over the past three years have kept egg prices elevated. Additionally, he mentioned California regulations, specifically Proposition 12.
In 2018, California voters passed Proposition 12, the Prevention of Cruelty to Farm Animals Act, which mandates that all eggs sold in California must come from cage-free hens, effective from 2022.
The egg market, like other markets, is susceptible to supply disruptions and government restrictions. Restrictions on caged eggs, which are prohibited by Proposition 12, typically make cage-free eggs $1 more expensive per dozen than what California regulations require, according to Daniel Sumner, an agricultural and resource economics professor at the University of California, Davis.
Sumner, a former senior economist with the President’s Council of Economic Advisers under Ronald Reagan and former Assistant Secretary of Agriculture for Economics under President George H.W. Bush, explained that prices rise due to regulations, inflation, and other government-induced issues.
Sumner said that voters’ choices have made California’s egg market more susceptible to natural supply fluctuations. “Anyone concerned about food prices knows that whether it’s lettuce, oranges, or peaches, prices fluctuate with weather, animal and plant diseases, and other temporary disruptions.” Ultimately, consumers will either pay higher prices or have to say goodbye to this essential food.
Earnest also expressed hope for the egg industry to recover and meet market demands. He said, “Eggs have long provided consumers with an affordable and nutritious choice, and I hope the industry can restore production to levels that meet market needs.” ◇