Throughout most of 2022, consumers were left aghast in supermarkets at the soaring cost of eggs. However, since the end of December, prices have crashed, providing much-needed relief to cash-strapped consumers battered by two years of negative real wage growth.
We first identified the reversal in egg prices in a Feb. 8 note titled “We’ve Got Great News: Wholesale Egg Prices “Collapse””. This was followed by “Egg Prices Finally Fall After Months Of Non-Stop Price Spikes” in March and “Eggflation Ends With Cal-Maine Shares Down The Most Since 2008″ in April.
Now new data from Urner Barry, a market research firm that tracks wholesale food prices, shows its Urner Barry Egg Index continues to plunge. Since peaking at $4.65 per dozen on Dec. 19, wholesale prices are now at .49.
Karyn Rispoli, a senior egg market analyst at Urner Barry, told CNN that wholesale prices began tumbling in late March as prices just hit annual lows earlier this month and have stayed there.
“While the egg market in 2022 was dominated by the bird flu, the market this year has been dominated by its absence,” Rispoli said.
Last year, the worst bird flu in years decimated the US’ egg-laying hen population, thus reducing egg supplies. In addition, farmers were grappling with soaring feed, diesel, and fertilizer costs.
Last month, egg producer Cal-Maine Foods recorded the largest monthly equity decline since 2008 as collapsing poultry prices depressed earnings.
“When considering what’s currently playing out for eggs, we think it is best for us move to the sidelines on Cal-Maine as we think risk/reward is now more balanced,” Stephens research analysts wrote in a note to clients.
Even though supply is coming online while bird flu appears to be under control — demand at supermarkets has yet to return.
USDA figures show there were 314 million egg-laying hens in the US in April, up from 308 million in December but still lower than 328 million in December 2021.
Data from NIQ, which tracks retail sales, shows for the four weeks ending on Apr. 22, retail egg sales in the US slid 4% compared with the same period a year before. Consumers are still budget conscious at a time retail egg prices remain high but have come off peaks. It might take a couple more months for egg demand to return.
by Tyler Durden
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