Food Industry

Brunch Pinch: Why Your Eggs Cost More

‍The still-recovering supply chain is making millennial America’s favorite meal a lot pricier.
Brunch Pinch: Why Your Eggs Cost More

Why are eggs and lettuce so expensive lately?

Mass illness among birds and greens is causing restaurant operators to spend more on their breakfast and lunch daypart menu essentials.

57 million chickens have been killed by avian flu or culled since the virus was first detected in January 2022.

The slaughter has caused the supply of eggs to drop drastically. With fewer eggs to sell, producers must raise the cost to cover expenses.

But are they raising too much?

US Senator Jack Reed sent a letter to the Federal Trade Commission in January to look into improper price manipulation by producers with a particular focus on Cal Maine Foods, the largest egg company in the country.

Despite only 5% of the total hen flock depleted, carton prices have doubled in a year. Smaller farms didn't bring up their prices to nearly the same levels.

Meanwhile, Cal Maine saw a skyrocketing 110% increase in profits to nearly $200 million.

Why are California eggs particularly pricey?

The average cost of a dozen large eggs in the Golden State increased from $2.35 to $7.35 in one year. New California legislation has added another snag to the egg supply chain.

In 2018, voters passed Proposition 12 which mandated all eggs sold in the state come from cage-free hens.

"Retrofitting the farm would cost $4-5 million, and we didn't have the money," said John Lewis Jr., president of Farmer John Egg Farm in Bakersfield. Only 1/3 of eggs bought in the United States come from cage-free birds.

LAeats will get into what "cage-free" means in a future article too.

Fresh Butter Lettuce

What about lettuce?

More than half of the lettuce consumed in the United States is grown in Salinas Valley, California. The year-round growing season helps producers achieve huge market share.

Impatiens necrotic spot virus (INSV) is carried by common houseplant pests. Without any way to protect against it, California farmers lost up to 80% of their lettuce crops.

Lettuce prices have gone up 25% from last year - triple the inflation rate of other fruits and vegetables.

What does this situation reveal about the food industry?

1. Climate change will continue to drastically impact our food supply. Warmer temperatures cause viruses to spread more easily.

Meanwhile, natural habitat destruction is displacing animals and causing humans to interact with species in ways we never have before.

The sicknesses animals like swine and insects carry can shrink the supply of meats and produce. They also cause labor shortages when they spread to humans and folks can’t work.

Non-Industrial Approach - Pasture Raised Chickens

2. The consolidation of food suppliers leaves restaurants vulnerable to disruptions. Cal Maine accounts for nearly 17% of egg industry sales.

Reduced competition enables a handful of large companies to set prices without consequences when consumers are left with no other choice.

Additionally, the close quarters in which animals are held on factory farms enables disease to spread more quickly. When millions of birds are caged together in poorly-ventilated warehouses, one sick chicken can have a disastrous ripple effect.

Small farms need financial support to innovate more sustainable growing practices and build out their supply chains. An interconnected system of local suppliers creates a more reliable source of ingredients that restaurants rely on for their business.

Continue Reading