What Is Behind the Soaring Price of Eggs? thumbnail

What Is Behind the Soaring Price of Eggs?

By Neland Nobel

Price is largely determined by the interaction of supply and demand and the cost of the factors of production.  In the case of eggs, it is primarily a drop in the supply of eggs, while demand has been fairly constant.  However, there also has been a rise in the cost of the factors of production as well.

It is more than just a price problem.  In some stores, eggs are simply not available or they are available at certain times and then disappear.

The primary cause for the near tripling of the price of eggs is the Avian Flu, which has reportedly killed about 60 million egg-laying hens. That egg-laying hens have been the focal point of the flu explains why the shortage of chickens has not caused a commensurate increase in the cost of chickens we eat for meat.  To be sure that cost is up as well, but not as much. And since it takes a while for a chick to grow into a mature hen, the new egg supply will likely take until summer before we should see substantial improvement.

The rise in the cost of eggs of course directly influences the cost of breakfast for many.  But eggs are also used extensively in baked goods, mayonnaise, and processed foods.

However, there are other factors making things worse.  About 10 states have passed rules, either through legislation or initiative, that require chickens to be provided more space by law.  While well-intentioned, this can substantially increase the cost of having chickens as a commercial endeavor.  Much of the initiative for this movement is coming from the Humane Society.

Many farmers provide both cage-free eggs and eggs free of antibiotics to those consumers who prefer them.  Those concerned about the treatment of chickens and/or concerned about health issues have choices. Eggs meeting this criterion usually carry a premium price in the market, but we think that is fair.  It also is an important signal telling farmers there is rising demand for cage-free eggs, encouraging them to produce more eggs in the desired manner.

We have nothing negative to say about people who are willing to pay more of their own money to get eggs from a source they consider more humane or healthy. However, they do not have a right to impose their views by force (that is what a law is) and make everyone else subsidize their opinions.

Many of the states that have passed such legislation or initiatives are left-of-center states such as Michigan, California, Oregon, and Nevada.  But Arizona is the 10th state to do so.  This movement raises an interesting question: why should space requirements be limited to chickens and who decides the optimum space that can be defined as humane?  Should some voters impose costs and viewpoints on others by force when the marketplace already provides people with voluntary choices?

Some people think making animals subservient to people (as in food, zoos, and rodeos) is wrong and they become vegans.  That is their prerogative. However, they have no right to impose those views on others.  And once again, the free market allows for voluntary choice.  If a person wants to eat fake meat grown in a laboratory, they are free to do so.  However, once again we see the environmental movement opposed to beef because belching and farting cows supposedly add to global warming. However, substituting beans as a form of protein may well lead to the same alleged problem for the environment.

The history of such movements is it starts with hectoring, leads to subsidization and regulation, and ends in compulsion.

There just are no areas of life left where Left Wing do-gooders do not feel they have a right to impose themselves on others.

Environmental and ESG requirements have additionally starved traditional hydrocarbon energy sources of capital, causing the price of oil and natural gas to rise.  Increased fuel costs cause overall farming costs to rise.  Tractors don’t run on solar panels.  Thus, grains that make up a substantial part of the cost of feeding chickens, have risen substantially.  Natural gas, from which fertilizer is produced, has also gone up in cost, also adding to the cost of raising feed in the first place.

Everything about moving and producing food requires energy.

All increasing input costs have to passed along to the consumer by the farmer, the distributor, and finally the retail store.

Rising costs for labor also increase the cost of eggs in every stage of production, aggravating the situation.

Speaking personally, I am willing to pay extra for free-range eggs and those free of antibiotics.  However, I do not feel I have the right to impose that view on others and force them to bear the cost.

Meanwhile, the government could help by rejecting extreme environmentalism, turning loose America’s energy production, balancing the budget to slow down money printing, and reducing the costs of regulation.

As for the bird flu, it will just have to run its course and the hen population will need to recover.

The answer to high prices is more production, that is if the government and coercive do-gooders don’t get in the way.