Why Are Egg Prices So High? Understanding the 2025 Price Surge

If you've been shocked by egg prices at the grocery store, you're not alone. Eggs that cost less than $2 per dozen just a few years ago have surged to $5, $6, or even $9 in some regions— a price increase that directly impacts household budgets and has become a political talking point. Understanding why egg prices spike so dramatically helps you anticipate future price movements and make better purchasing decisions.

Egg prices don't rise randomly. They're driven by specific, measurable factors including avian influenza outbreaks, flock recovery times, production costs, regulatory requirements, and the economics of inelastic demand. While the current spike is severe, historical patterns show these increases are typically temporary—but recovery takes months, not weeks.

The Primary Culprit: Avian Influenza (Bird Flu)

The single most important factor driving today's high egg prices is avian influenza—specifically the H5N1 strain of highly pathogenic avian influenza (HPAI). This isn't a new problem, but the current outbreak that began in late 2024 has been particularly devastating.

Understanding the Current Outbreak

The historic surge in egg prices stems from H5N1 avian influenza hitting poultry producers especially hard beginning in winter 2024-2025. A new version of the virus emerged in wild migratory birds in September 2024 and then jumped to domesticated fowl, spreading rapidly through major egg-producing regions.

The numbers are staggering:

• 150+ million poultry birds killed across all 50 states since 2022 to combat H5N1
• 127 million egg-laying hens affected since 2022, representing 11% of the five-year average annual layer inventory of 383 million hens
• 20 million layers lost in Q4 2024 alone—during the year's highest demand period
• 75% of domestic poultry losses are table-egg-laying hens, making egg production the hardest-hit sector

Why Entire Flocks Must Be Culled

The severity of egg price spikes becomes clearer when you understand how avian influenza is managed:

No Treatment Exists: There is no treatment for highly pathogenic avian influenza in chickens. Infected chickens show signs of severe illness or death very quickly—often within 24-48 hours. The virus is extraordinarily lethal and contagious among poultry.

Entire Flocks Are Euthanized: Current standard practice requires euthanizing the entire flock if the virus is detected, even if only a few birds show symptoms. This prevents the virus from spreading to other facilities. When a commercial operation houses 100,000+ laying hens (common in modern egg production), a single detection can eliminate massive egg-producing capacity overnight.

Facilities Must Be Sanitized: Before new birds can be introduced, affected facilities must undergo extensive cleaning and disinfection protocols. This adds weeks or months to the recovery timeline.

Why Recovery Takes So Long

Even after an outbreak is contained, rebuilding egg supply is a slow process:

• 20+ weeks from egg to production: It takes 20 or more weeks for birds to develop from incubated eggs to pullets to production-ready laying hens
• Facility downtime: Cleaning, disinfection, and biosecurity protocols must be completed before new birds arrive
• Production ramp-up: New layers don't immediately produce at full capacity; there's a maturation curve
• Continuous threat: Normal conditions won't return unless bird flu recedes in nature or laying hens develop resistance, neither of which is guaranteed

This means that even if no new outbreaks occur, the supply shortage can persist for 5-6 months after a major culling event.

The Economics of Inelastic Demand

Understanding why egg prices can spike so dramatically—and why producers can charge high prices—requires understanding demand economics.

What Is Inelastic Demand?

Eggs are considered an inelastic good, meaning that even when prices change significantly, consumers continue buying roughly the same quantity. When gasoline prices double, people might carpool or drive less, but when egg prices double, most households still buy eggs because:

• No close substitutes: While you can substitute other proteins for beef or chicken, it's much harder to replace eggs in baking, breakfast routines, and many recipes
• Small budget share: Even at $6/dozen, eggs remain relatively affordable compared to other protein sources on a per-meal basis
• Essential ingredient: Eggs are fundamental to countless recipes and food products, from baked goods to mayonnaise
• Habit-driven consumption: Breakfast eggs, regular baking, and routine purchases continue despite price changes

Supply Shocks Hit Harder With Inelastic Demand

This relatively unchanging demand means that supply factors have outsized impact on prices. When 10% of the laying flock is eliminated, prices don't rise 10%—they can rise 50%, 100%, or more because:

• Demand remains constant while supply shrinks
• Producers face the same costs to raise fewer hens
• Fixed costs (facilities, equipment, labor) are spread over fewer eggs
• Grocery stores and restaurants still need eggs regardless of wholesale prices

This economic dynamic explains why a 7-10% reduction in supply can cause prices to more than double—a phenomenon we're witnessing in 2025.

Production Costs: The Baseline Price Floor

Even without bird flu, egg production involves substantial costs that establish a price floor below which producers can't profitably operate.

Feed Costs: 60-70% of Production Expenses

Poultry feed—mainly corn and soybean meal—constitutes 60-70% of egg production costs. This makes egg prices particularly sensitive to:

• Corn prices: Drought, export demand, and ethanol production all affect corn costs and flow directly to egg prices
• Soybean meal prices: Protein source for feed; affected by global soybean markets and crush margins
• Feed conversion ratios: Efficiency of converting feed into eggs varies by breed and management practices

When corn prices spiked in 2022 due to the Ukraine war's impact on global grain markets, egg production costs rose in tandem, contributing to higher prices even before bird flu outbreaks.

Energy and Transportation

Rising electricity and transportation costs directly increase production and distribution expenses:

• Climate-controlled facilities: Modern egg production facilities require precise temperature and ventilation control
• Refrigerated transport: Eggs must remain cold from farm to grocery store, requiring fuel and refrigeration
• Processing equipment: Washing, grading, and packaging eggs is energy-intensive

Labor Costs and Workforce Challenges

Wages and workforce shortages affect farm operations, especially with cage-free regulations requiring more manual labor. Labor challenges include:

• Difficulty recruiting and retaining farm workers
• Higher wages needed to attract workers
• Increased labor requirements for cage-free systems
• Skilled labor needed for biosecurity protocols

Regulatory Impact: Cage-Free Requirements

Several states have mandated cage-free egg production, adding another cost layer that affects retail prices in those markets.

What Cage-Free Means

Cage-free systems allow hens to roam within enclosed spaces rather than being confined to cages. While this improves animal welfare, it comes with trade-offs:

Higher Production Costs: Cage-free eggs are typically 30-50% more expensive than conventional eggs due to:

• More space required per bird (reducing facility efficiency)
• Higher mortality rates (pecking, disease spread)
• Increased labor requirements for egg collection and facility management
• More feed consumption (hens burn more calories moving around)
• Higher facility construction and maintenance costs

State Mandates Create Regional Price Variations

States like California, Oregon, Washington, Colorado, Michigan, and Massachusetts have implemented or are implementing cage-free requirements. This creates:

• Structurally higher baseline prices in these states even without bird flu
• Supply constraints as producers transition facilities
• Interstate price differences that can be substantial (California eggs at $8.97 vs. Midwest at $6.07)

Historical Patterns: This Has Happened Before

Today's high prices aren't unprecedented. Looking at historical patterns provides perspective and helps set expectations for when prices might normalize.

Three Major Spikes in the Last Decade

While egg prices were relatively stable from the 1980s through early 2010s, the past decade has seen three major spikes, all triggered by outbreaks of avian influenza:

• 2015 Outbreak: HPAI affected over 50 million birds; prices peaked at $3+ per dozen (significant at the time)
• 2022-2023 Outbreak: Major bird flu wave; prices peaked at $5.38 per dozen in December 2022
• 2024-2025 Current Outbreak: The most severe yet; prices hit $6.23 nationally in March 2025, with regional peaks near $9

Years with Largest Price Changes

Historical data shows the largest annual price increases occurred in:

• 1973: 48.67% increase (oil crisis and general inflation)
• 2022: 32.24% increase (first wave of current HPAI outbreak)
• 2025: 31.72% increase (projected for full year)

Good News: Spikes Are Temporary

The encouraging pattern is that disease-driven price spikes have historically been temporary:

• Eggs that cost over $5 per dozen in December 2022 had dropped to $0.84 by May 2023—an 83% decline in five months
• Recovery happens once flocks are rebuilt and no new outbreaks occur
• Prices typically return to near-baseline once supply normalizes

However, recovery requires 20+ weeks for flock rebuilding, meaning consumers should expect elevated prices to persist for several months from the last major outbreak.

USDA Forecasts: What to Expect in 2025

The U.S. Department of Agriculture provides regular forecasts for egg prices based on current conditions and expected supply recovery. Here's what they project:

Official USDA Projections

• 2025 full-year increase: USDA forecasts retail egg prices will increase 41.1% for the entire year compared to 2024
• Additional increase expected: Prices are predicted to jump another 20.3% by year's end beyond current levels
• Peak timing: Prices may remain elevated through spring/early summer before recovery begins

Key Variables Affecting the Forecast

Several factors could cause actual prices to diverge from forecasts:

• New outbreaks: Additional bird flu detections would extend high prices
• Faster recovery: If no new cases emerge and rebuilding accelerates, prices could fall sooner than expected
• Feed costs: Corn and soybean price movements will affect production costs
• Seasonal demand: Holiday baking seasons create demand spikes that can temporarily lift prices

Why Egg Prices Matter for Your Budget and the Economy

High egg prices aren't just a grocery store annoyance—they have broader economic impacts that affect personal finances and economic indicators:

• Direct household impact: The average American household consumes about 20 dozen eggs per year. At $6 vs. $2 per dozen, that's an additional $80 annually—modest for one item but significant when many food prices are elevated
• Food service industry costs: Restaurants, bakeries, and food manufacturers use eggs extensively. Higher egg costs either compress margins or flow through to menu prices
• Inflation measurements: Egg prices are part of the Consumer Price Index (CPI). Dramatic egg price increases contribute to overall food inflation numbers that affect everything from Social Security adjustments to Federal Reserve interest rate decisions
• Political visibility: Eggs are a highly visible, frequently purchased item. Price spikes generate political pressure and become campaign talking points
• Agricultural economics signal: Egg price spikes reflect broader challenges in animal agriculture including disease management, biosecurity, and production costs

Understanding these ripple effects helps explain why egg prices receive so much attention despite being a relatively small part of most household budgets.

What Can You Do About High Egg Prices?

While you can't control bird flu outbreaks or egg production cycles, you can take practical steps to minimize the impact on your budget:

Short-Term Tactics

• Buy store brands: Private label eggs are typically 10-20% cheaper than name brands with identical quality
• Consider non-cage-free: If your state allows conventional eggs and you're comfortable with them, they're 30-50% cheaper than cage-free
• Watch for sales: Retailers sometimes offer eggs as loss leaders to drive traffic; stock up during sales if you have storage
• Proper storage: Eggs last 3-5 weeks refrigerated; buying in bulk during lower prices can save money if you use them before expiration
• Egg substitutes for baking: For some recipes, substitutes like flax eggs, applesauce, or commercial egg replacers work fine and cost less during price spikes
• Shop across state lines: If you live near a lower-price state, the savings can be substantial ($8.97 in CA vs. $6.07 in neighboring states)

Longer-Term Strategies

• Raise your own chickens: If you have space and local regulations allow it, backyard chickens provide eggs at ~$2-3/dozen production cost (not counting initial setup)
• Reduce egg dependence: Adjust your diet to use fewer eggs during high-price periods; explore alternative breakfast proteins and non-egg baking recipes
• Budget flexibility: Recognize that egg prices are cyclical; budget for higher costs during outbreak years and lower during recovery periods
• Buy futures contracts: For commercial users, egg futures on the CME allow hedging price risk (not practical for individual consumers)

What NOT to Do

• Don't hoard unnecessarily: Eggs have limited shelf life; buying six months' worth creates waste
• Don't buy unwashed farm eggs without proper handling: Salmonella risk is real; ensure proper food safety
• Don't expect prices to drop immediately: Recovery takes months; plan accordingly rather than waiting for a quick decline

Looking Ahead: When Will Prices Normalize?

Based on historical patterns, production cycles, and current outbreak status, here's what to expect:

Short-Term Outlook (3-6 Months)

Prices will likely remain elevated through spring and possibly into early summer 2025 because:

• Flock rebuilding from Q4 2024 cullings won't produce significant new supply until late spring
• Risk of new outbreaks during spring migration season
• Production costs remain high even as supply recovers
• Holiday demand (Easter) may temporarily sustain higher prices

Medium-Term Outlook (6-12 Months)

If no new major outbreaks occur, prices should begin declining by summer 2025:

• Rebuilt flocks reach full production capacity
• Supply-demand balance normalizes
• Seasonal demand decreases (less holiday baking)
• Historical pattern suggests potential return toward $2-3 per dozen

Long-Term Considerations

Several structural factors may affect long-term egg pricing:

• Climate change: May increase avian influenza outbreak frequency and severity
• Cage-free mandates spreading: More states may adopt cage-free requirements, structurally raising baseline prices
• Feed cost trends: Climate impacts on corn and soybean production could keep production costs elevated
• Biosecurity improvements: Better disease prevention could reduce outbreak severity and frequency
• Genetic resistance: Research into avian flu-resistant chicken breeds could eventually reduce outbreak impact

Conclusion

Egg prices are high because of a perfect storm of factors: devastating avian influenza outbreaks that eliminated 150+ million birds since 2022, the long recovery time needed to rebuild flocks (20+ weeks), inelastic consumer demand that doesn't adjust to price changes, elevated production costs for feed and energy, and regulatory requirements that increase costs in some states.

The current spike—with prices reaching $6-9 per dozen in many markets—represents one of the largest and fastest increases in egg price history. The February 2025 monthly increase was the largest since 1980 when adjusted for inflation, reflecting the severity of the H5N1 outbreak.

The good news is that history shows these disease-driven spikes are temporary. When the 2022-2023 outbreak subsided, prices fell from over $5 to under $1 per dozen within months. The same pattern should eventually repeat—but "eventually" means waiting through the flock rebuilding cycle, which takes at minimum 5-6 months from the last major outbreak.

Understanding these dynamics helps you make better decisions. Don't expect prices to drop quickly. Do look for ways to reduce costs or adjust consumption during peak price periods. And recognize that the next outbreak is likely just a matter of time, given that wild bird migration continuously reintroduces the virus to domestic poultry populations.

The next time egg prices spike, you'll understand why: It's not grocery stores gouging or government mismanagement—it's the economics of agricultural disease outbreaks intersecting with inelastic demand and biological production constraints. Knowledge doesn't lower prices, but it does replace frustration with understanding and helps you plan accordingly.