Trump asserts responsibility for decreasing egg prices, yet consumers may not have detected the price drop.
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Egg prices plummetting, but not for consumers
Cheer up, folks! Egg prices are diving, according to the Trump administration. But if you haven't noticed a dip at the grocery store, you're not alone.
"When I took over, eggs were skyrocketing, and now they're plummeting," President Donald Trump said aboard Air Force One.
White House Press Secretary Karoline Leavitt echoed the sentiment at a press briefing. She highlighted that wholesale egg prices have fallen by 47% since January 24. However, this decrease in wholesale prices hasn't translated to lower consumer prices at the grocery store, which are actually on the rise.
For the third consecutive week, wholesale egg prices have dropped to $4.15 per dozen, the US Department of Agriculture reports. But the average consumer price for eggs stands at $5.90, up $0.94 from last month. This disparity results from grocery stores holding onto higher prices to recoup losses from previous weeks and due to increased production costs.
"These declines have yet to be reflected at store shelves, and demand remains dampened," the USDA stated in its weekly egg markets report.
The reason for the ascending consumer prices? A supply and demand imbalance, largely stemming from the avian flu outbreak that's decimated over 166 million birds, including egg-laying hens, since early 2022. Although wholesale prices have been decreasing due to reduced demand, consumer prices continue to rise as a consequence of ongoing bird losses and increased costs for egg production.
Mexico and Turkey are helping to offset the shortage with a combined contribution of 10 million eggs. These tariff-free imports aim to alleviate the domestic supply deficit. The US, on average, produces 90 billion eggs annually. But with the Easter and Passover holidays falling in mid-April, there's still a gap between supply and demand.
Kevin Bergquist, sector manager at Wells Fargo Agri-Food Institute, notes that consumers may hold onto their egg money for a week or two because of traditions like Easter, which could postpone any potential price drop. However, Spring migration presents another challenge, as wild birds can carry and spread the avian flu to egg-laying flocks.
As for Trump's $1 billion avian flu response plan, its impact on lowering egg prices is yet to be fully realized. Announced on February 28, just as prices for wholesale eggs began falling, the plan aims to combat the avian flu outbreak. But until the crisis is under control and flocks are replenished, egg prices may remain volatile.
Enrichment Insights:
- Supply and Demand Balance: The highly pathogenic avian influenza (HPAI) has led to significant egg shortages, causing consumer prices to rise despite declining wholesale prices.
- Market Dynamics and Consolidation: The egg market is mainly dominated by a few large producers, allowing them to exert price influence in different regions.
- Inflation and Production Costs: Inflation has increased the cost of producing eggs, along with higher labor, feed, and other input costs, making it difficult for farmers to maintain profitability despite higher prices.
- Government Response: The US government is providing relief to affected farmers and implementing expanded biosecurity measures to combat the avian flu outbreak. However, these actions have yet to fully mitigate price increases.
- Consumer Behavior: Consumers may delay their egg purchases due to traditional holiday celebrations and anticipate higher prices during the spring migration, when wild birds spread the avian flu to egg-laying flocks.
- Despite the fact that the Trump administration claims egg prices are diving, affordability for consumers remains a concern due to ongoing bird losses, increased production costs, and traditionally high demand during holidays like Easter.
- To help offset the domestic egg shortage caused by the avian flu outbreak, tariff-free imports from Mexico and Turkey account for 10 million eggs, aiming to alleviate the supply deficit in the United States.
- It is likely that consumers may hold onto their egg money for a week or two due to traditions like Easter, delaying any potential price drop and keeping egg prices volatile.
