Bird Flu Outbreak Sparks Egg Shortage, Driving Up Prices for Twin Cities Businesses

The bird flu outbreak has caused an egg shortage, leading to rising prices and financial strain on Twin Cities businesses. Many, including bakeries, are considering raising prices. Lutunji’s Palate Bakery and Café has kept prices stable for nearly three years but may soon adjust. Owner Lutunji Abram reports a 28% increase in egg prices, raising her monthly spending from $250 to $420.

Her bakery uses 50 to 70 dozen eggs each month, and shortages force her to buy at higher retail prices. Despite slower revenue, she focuses on growing her customer base. Inflation, however, is outpacing foot traffic. Abram is considering a price hike of 75 cents to $1 per item. She plans to decide by spring, hoping her quality products will keep customers loyal.

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• Are Egg Producers Taking Advantage of Bird Flu to Inflate Prices?

Bird Flu Outbreak Sparks Egg Shortage, Driving Up Prices for Twin Cities Businesses

The ongoing bird flu outbreak has caused an egg shortage, leading to rising prices that are putting financial pressure on businesses across the Twin Cities. Many are now facing the tough decision of whether to pass these additional costs onto consumers. Bakeries in Minneapolis are especially affected, with some considering price hikes to stay afloat. Lutunji’s Palate Bakery and Café, which has maintained stable pricing since opening nearly three years ago, may soon have to adjust. According to owner Lutunji Abram, egg prices have surged by 28% this year alone, significantly impacting her expenses.

Her monthly spending on organic eggs has jumped from $250 to $420, an increase of $170. Given that her bakery relies on 50 to 70 dozen eggs each month for various menu items, shortages at wholesalers force her to buy from retail stores, where prices are even higher—sometimes $4 to $8 more per dozen. While inflation continues to outpace foot traffic, Abram has kept her prices steady in an effort to build a loyal customer base. She notes that while revenue is slower, attracting new customers helps sustain growth.

However, with operational costs rising, she is now considering a price increase of 75 cents to $1 per item. By spring, she expects to make a final decision on whether she can continue absorbing the costs or will need to raise prices, though she remains optimistic that her high-quality products will keep customers coming back.

Are Egg Producers Taking Advantage of Bird Flu to Inflate Prices?

Egg producers attribute the recent spike in prices to the ongoing bird flu outbreak, but critics argue that major corporations may be leveraging their market power to maximize profits at consumers’ expense. Advocacy groups, Democratic lawmakers, and an FTC member are pushing for an investigation, as egg prices have soared to a record average of $4.95 per dozen. The Trump administration recently introduced a plan to combat bird flu, though its impact on egg prices remains uncertain.

Industry leaders and experts primarily blame bird flu for the price surge, as the outbreak has led to the culling of over 166 million birds, including 30 million egg layers since January. The USDA mandates the slaughter of entire flocks when infections are detected, reducing the national egg-laying population by roughly 12% to 292 million birds. American Egg Board President Emily Metz insists that supply disruptions caused by the virus are solely responsible for the price increases.

However, groups like Farm Action suspect monopolistic behavior, pointing out that egg production is down only 4% from last year, yet some grocery store shelves remain empty. The group highlights that while supply has only slightly declined, large egg corporations are reporting record profits. In 2023, a jury found that major producers had previously manipulated supply to raise prices, further fueling skepticism.

Before the outbreak, retail egg prices typically remained below $2 per dozen, but they have more than doubled since. While most major producers keep their financial data private, publicly traded Cal-Maine Foods, which controls 20% of the U.S. egg market, saw its profits soar. The company reported $219 million in profits last quarter, with eggs selling at an average of $2.74 per dozen—up from just $1.2 million in early 2022, when prices were $1.37 per dozen. Cal-Maine has also expanded production, selling 330 million dozen eggs this quarter compared to 288 million last year.

Despite concerns over price manipulation, analysts argue that high egg prices do not necessarily indicate foul play. Farmers hit by outbreaks face significant financial losses, as it can take up to a year to replace flocks. While the USDA compensates farmers for culled birds, it does not cover all expenses. Rising costs for feed, fuel, and labor, along with investments in biosecurity, have also contributed to higher prices. Some experts believe prices are simply a reflection of market conditions, where tight supplies naturally drive costs higher.