Get scrambling: Eggs haven’t been this cheap in over a decade

It doesn’t matter if you take your eggs scrambled, fried or in an omelet stuffed with gooey cheeses and crisp veggies, so long as you are taking advantage of the cheapest summer egg prices since 2006.

Just one stroll through the grocery store and you’ll see that the eggs are cheap – really cheap.

With prices as low as 69 cents for a dozen large eggs in Wichita, and with a nationwide average of $1.33 for a dozen of large, grade A eggs, there is financial incentive to get creative with eggs in the kitchen.

“Consumers need to boil some eggs and enjoy some good times for a while,” said Scott Beyer, poultry nutrition and management specialist for K-State extension.

It was less than two years ago when consumers were paying an average of nearly $3 a dozen, according to the Bureau of Labor Statistics, when egg prices soared due to a nationwide avian influenza outbreak that resulted in the death of more than 43 million birds.

“The consumer should now be getting their just reward for paying such high prices in years past,” Beyer said.

Why are eggs so cheap?

Because as egg producers began to replenish the supply – a little too eagerly – after the avian flu through 2016 and the first half of 2017, downward pressure was placed on egg prices, resulting in the low cost you are now seeing in the grocery store.

“It’s easy,” Beyer said, referring to the supply and demand of eggs. “Too many hens and too many eggs.

“My dad always used to say they can’t handle prosperity and like anything in ag, when prices are good (for the producer), everybody starts planting – everybody starts putting hens in cages. Next thing you know, prices skyrocket to the bottom. It’s very classic.”

In addition to an avian flu recovery and more hens in the market, the push for cage-free eggs has led to an increased supply of eggs.

“It isn’t as simple as it seems where you just throw the cages out and throw the hens back in,” Beyer said.

Rather, Beyer said new state-of-the-art facilities were constructed, leaving the old, caged facilities idle. But those idle spaces did not stay quiet for long.

“If you’re sitting around and doing the numbers and you’re seeing $3-$4 dozen eggs, then you’ll find a way to use those nearly idle facilities, and you’ll put birds everywhere you can,” he said. “You’ll utilize those barns that haven’t been used for a long time.”

More hens in more spaces led to too many eggs, resulting in a cheap scrambled breakfast for consumers.

The United States Department of Agriculture said in June that it expects the total U.S. egg supply to increase 1.3 percent to 8.829 billion dozen eggs in 2017, the highest going back to 1992.

But by the time producers realized they were saturating the market, Beyer said it was too late to do anything about it because laying hens have a two-year cycle. Once the hen is 18-20 weeks old, she will produce an egg daily for about two years.

“It’s not like water where you can just turn it off and on,” he said. “And so overproduction can really depress prices pretty quick because most people are just not willing to turn those hens off because with them producing they may be losing money, but they’re losing less money than if they weren’t.”

How long will eggs stay cheap?

Egg prices are on track to decrease an additional 8 to 9 percent in 2017, the United States Department of Agriculture predicted on Tuesday. The department predicts prices will go up 1 to 2 percent in 2018.

Beyer said the prices of grain to feed hens are currently low with no signs of changing. There hasn’t been any major avian influenza outbreaks, and there hasn’t been any major situation, such as a drought somewhere across the globe that would pull U.S. produced eggs to another country and level out the U.S. egg supply.

“So boy, we’re just kind of stuck right now,” he said.

And while he does not see an end to low prices in sight, he said eventually prices will regulate.

“Since eggs aren’t really covered by government programs, sooner or later somebody will call it quits,” Beyer said. “And when they do, they will take millions and millions of birds off the market either through bankruptcy or idling their birds.

“This happens in the poultry industry from time to time because of no government controls. But somebody has to idle their situation. And when they do, it doesn’t take many hens in order to bring the prices back. You take off 5 million hens and that’s 5 million eggs a day.”

The next big thing

Are low prices hurting producers?

“Oh, absolutely,” Beyer said. “They’re losing money on every set of eggs that goes out the door big time.”

For now, the egg industry is hoping eggs become the next big food item, Beyer said.

“This is classic in all agriculture,” he said. “If you look up and see a commodity and it’s falling apart on prices, your computer guys, your food scientists, your food product development people are going to go, ‘Wow, look how cheap eggs are. Can we put them in tacos? Can we put them on sandwiches?’

“They’ll think of a million places to put them. So the egg guys are hoping, if we get on that one product, like hot wings or chicken nuggets, we too can fly high for awhile.”

This story was originally published July 26, 2017 at 6:55 PM with the headline "Get scrambling: Eggs haven’t been this cheap in over a decade."