If you’ve been to the grocery store lately, you’ve probably faced sticker shock on an unlikely product: eggs. Egg prices more than doubled from December 2021 to December 2022, rising 237% to average $4.25 per dozen nationwide. In some areas, people report paying as much as $6 or $7 for a dozen eggs!
The one upside is that this has led to some pretty funny memes:
Okay I lol’d pic.twitter.com/OP3tvkuHqr
— Brad Polumbo 🇺🇸⚽️🏳️🌈 (@brad_polumbo) January 19, 2023
But it’s left many cash-strapped Americans wondering… why are eggs so expensive right now?
Part of this is just the overall inflation we’ve experienced, which has its roots in everything from global supply chain issues to the Federal Reserve’s loose monetary policy to excessive stimulus spending under both the Trump and Biden administrations. But the egg price increases are far too extreme to be explained by regular inflation alone. There’s another reason—and some conspiracy theories, too.
Some on the political Left, like the socialist academic Robert Reich, are arguing that egg prices are high because of “corporate greed.”
Egg prices are up 60%. That’s absurd. People are paying up upwards of $6 and $7 for a dozen eggs.
Why? Corporate greed.
Cal-Maine, the largest egg producer in the US, is raking record profits — $198 million in its latest quarter.
That’s a 65% increase from a year ago.
— Robert Reich (@RBReich) January 20, 2023
This doesn’t make ANY sense. Egg prices were just $1.79 a little over a year ago, in December 2021. Were the corporations just more generous then? Did they suddenly become extra greedy all of a sudden?
Of course not. It’s an absurd conspiracy theory ultimately motivated by the blind ideological hatred these types have for business.
The real reason for high egg prices, as is usually the case, has its roots in the basic economics of supply and demand. Unfortunately, an avian flu has wiped out more than 43 million egg-laying hens since February 2022, according to the US Department of Agriculture. That’s resulted in a 29% decrease in the US egg stock, aka the supply.
When a product becomes more scarce yet is still in high demand because it’s part of people’s routines, prices will rise. That’s how the market rations the product to those who want/need it most. It’s also how the market fixes the shortage over time. Those high prices will encourage firms to do everything they can to ramp up supply, which will eventually bring prices back down.
Yes, high egg prices are undoubtedly hurting Americans right now. But the good news is the problem has a simple economic explanation, and if we just let the market work, it will sort itself out soon enough.