Will egg prices ‘crack’ before Easter?

Wholesale egg prices across the U.S. have dropped precipitously since hitting an all-time high just a few weeks ago, but it’s not clear if consumers will see significant savings at the checkout ahead of the upcoming and “egg-centric” Easter holiday.

Widespread outbreaks of avian bird flu have decimated U.S. flocks and helped drive wholesale egg prices to a record $8.58 per dozen on Feb. 28. But as of last Friday, prices paid by retail outlets declined to $4.83 per dozen, according to Expana data cited in a report by CNBC.

Consumer demand has declined amid the record-high prices but is set to head back up as Easter draws closer. And it’s not clear how fast lower wholesale costs will show up on shoppers' receipts. Easter is April 20.

In a report released earlier this week, the USDA noted that no new incidents of highly pathogenic avian influenza have been reported so far in March, but while wholesale supplies have begun to recover, price decreases were not yet reflected in the retail market.

“The calendar is nearing the start of the Easter demand season and it remains to be seen if price levels will be able to find a level supportive of holiday demand,” the USDA report reads. “According to the U.S. Bureau of Labor, in February, the Consumer Price Index for eggs increased 10.4%, 159% over the year ago level, with an average price of $5.90 per dozen, up $0.94 per dozen from last month.”

A new analysis from economists with Wells Fargo’s Agri-Food Institute found that since Jan. 1, there have been over 40 separate incidents of HPAI infections in the U.S. commercial table egg industry, causing the loss of more than 28 million laying hens, per USDA data.

The outbreak has impacted flocks in nine states — Arizona, California, Iowa, Indiana, Missouri, North Carolina, Ohio, Pennsylvania and Washington. As of Feb. 1, the total U.S. flock size numbered about 291 million hens, which means roughly 9% of the laying hens have been lost in just the past two months.

Wells Fargo industry analysts note that it takes several months to sterilize egg production facilities and repopulate the location with immature birds. Egg production, according to the report, is lost for an additional period until those replacement hens begin to lay eggs.

“Because of the loss of so many hens in this last cycle of HPAI, the supply of new chicks is also under pressure,” the report reads. “A company can’t order a new flock of a million hens and get that overnight. Recovery takes time.”

The Agri-Food Institute report warns that while outbreaks appear to have abated so far in March, bird flu incidents are likely this time of year and consumers should expect ongoing egg price volatility.

“Egg prices will likely remain highly variable for the near future, but at a higher-than-usual level,” the report reads. “In the short term, we will likely see a continuation of high egg prices.”