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Why organic eggs are suddenly cheaper than conventional ones

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Brown chicken eggs in a carton are seen above a selection of other egg cartons, including a brand called Phil's, at a supermarket in ChicagoPrices for organic and other specialty eggs are lower than regular eggs at grocery stores, demonstrating the effects of avian influenza.

Jim Vondruska/Reuters

  • Organic eggs are cheaper than regular ones, according to the largest egg producer in the US.
  • Avian influenza has decimated chicken flocks, leading to fewer eggs and higher prices.
  • Prices might not come down until well into 2023 as farms rebuild their flocks.

Next time you’re at the grocery store, buying organic eggs instead of regular ones might actually save you money.

Egg producer Cal-Maine Foods said in an earnings report on Wednesday that the average selling price for its specialty eggs rose to $2.370 per dozen. That’s higher than the $2.883 average price for conventional eggs. “Specialty” eggs include kinds of eggs that have historically been more expensive, such as organic eggs and cage-free eggs.

Grocery shoppers have taken note: Cal-Maine said that sales volumes of its specialty eggs increased 24% in the quarter that ended on Nov. 26. Sales volumes of regular eggs, meanwhile, fell about 2% over the same period. Cal-Maine is the largest egg producer in the US.

“Conventional egg prices exceeding specialty egg prices has occurred for the past three quarters but is atypical historically,” Cal-Maine said in a statement outlining its second-quarter earnings.

Hands holding pasture-raised eggsVital Farms lets consumers see where their eggs come from

Vital Farms

Avian flu has taken a toll on chicken flocks, leading to fewer eggs and higher prices

Inflation has driven prices for a variety of foods higher over the last two years. But the story behind egg prices involves another factor: Avian influenza.

The latest US outbreak started in February 2022. Since then, it has affected as many as 58 million chickens, according to data updated Thursday by the US Department of Agriculture, or USDA. Avian flu spreads rapidly and is often fatal, killing 90% to 100% of the chickens it reaches within a couple days of infection, according to the CDC.

Many commercial farms that raise chickens for regular eggs have had to kill birds when the disease appears in their flocks. That has led to a drop in the number of egg-laying chickens in the US, according to USDA. 

Prices have moved higher as a result. In November, egg prices rose 49% over the same month in 2021, according to the US Bureau of Labor Statistics. No other food product tracked by the Bureau’s Consumer Price Index saw prices increase as much during that period.

The higher prices for eggs on grocery store shelves have continued into the holiday season, which is traditionally a time of high egg demand as people bake seasonal sweets. Grocery stores normally tout their egg prices to consumers as a way to get them in the door, but avian flu “has led to a virtual halt by grocery retailers in including shell eggs in their weekly circulars,” a Dec. 23 USDA report on the egg market reads.

Farms that raise organic and other specialty eggs haven’t been as hard-hit by avian flu, leading to a more stable supply and prices

But farms that produce cage-free and other specialty eggs tend to be smaller than their mainstream counterparts. As a result, they haven’t been as hard-hit by avian flu and have been more reliable suppliers, Phil Lempert, a grocery industry analyst, told NPR’s Marketplace on Monday.

Organic and other specialty eggs still only make up a minority of the eggs sold in the US. They accounted for just over one-third of the eggs Cal-Maine sold during its latest quarter, the company said in its earnings report. 

Cal-Maine said that avian flu “will continue to exert downward pressure on the overall supply of eggs.” That pressure, and higher prices, could last well into 2023 as farms grow their flocks back to pre-outbreak levels.

Some consumers have started buying more expensive brands of eggs as prices on conventional eggs have gone up. Vital Farms, which sells pasture-raised regular and organic eggs for several dollars per dozen at grocery stores, has attracted new customers who previously bought mid-priced eggs. 

“We’re capturing some of those people in the middle and the cheapest eggs are capturing some of the people in the middle,” Russell Diez-Canseco, Vital’s president and CEO, said on an earnings call in August.

Are you a consumer who has been affected by rising egg prices? Reach out to Alex Bitter at abitter@insider.com or via encrypted messaging app Signal at (808) 854-4501.

Read the original article on Business Insider
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