[ad_1]
Grace Cary | Moment | Getty Images
Wholesale egg prices are poised to fall to $1 a dozen in coming weeks — the lowest level in almost two years — as prices undergo a dramatic retreat from record highs over the winter.
Wholesale prices — which retailers like grocery stores pay to egg distributors — were at $1.22 a dozen as of April 26, according to Urner Barry, a market research firm. Its Midwest Large White Egg price benchmark is a widely cited barometer in the egg industry.
related investing news
That’s down from a record $5.46 in December and $3.54 around the Easter holiday, both seasonal periods of high consumer demand. In all, prices have decreased by 78% in about five months.
More from Personal Finance:
Why it’s important to talk about money in your relationship
A recession may be coming — here’s how long it could last
3 ways to rethink old age and retirement, MIT expert says
They could soon dip below $1 a dozen if the trend holds, said Karyn Rispoli, who heads up egg market coverage at Urner Barry. It would be the first time since July 2021.
“It’s been all down [since Easter],” Rispoli said of the wholesale price. “It’s certainly been undergoing a very sharp correction.”
Why egg prices jumped and then fell
Egg prices were a standout in 2022, a year in which inflation was high for many consumer goods and services.
Egg supply was crimped by a historic outbreak of bird flu in the U.S., which killed millions of egg-laying hens. The impact of that supply reduction was exacerbated by the winter holidays, when egg demand typically peaks each year.
Now, there’s been a reversal.
Retailers really have carte blanche to do what they want with their pricing.
Karyn Rispoli
head of egg market coverage at Urner Barry
There haven’t been new cases of bird flu detected at commercial egg farms since December, allowing egg supply to rebound, said Brian Moscogiuri, global trade strategist at Eggs Unlimited, a supplier. Meanwhile, consumer demand is typically weak around this time of year, he said.
“Prices have collapsed beyond the expectation of the industry at this point,” Moscogiuri said.
Retail prices — which consumers pay at the store — tend to lag wholesale price trends. But the extent of consumers’ future savings on a carton of eggs is unclear, since retailers have discretion to set their shelf prices.
“Retailers really have carte blanche to do what they want with their pricing,” Rispoli said.
The average consumer paid $3.45 for a dozen large, Grade A eggs in March, according to federal data. That’s down from a record $4.82 in January but up from $2.05 a year earlier.
“All of a sudden, you might have eggs at a dollar or $1.69 [a dozen] again,” especially if retailers advertise eggs as a loss leader to get consumers in the store, Moscogiuri said.
However, some may try to recoup any financial losses on eggs from the winter months, in which case they may not readily pass along cost savings reaped at the wholesale level, he added.
[ad_2]
Source link
