Egg prices are already cracking
When I worked on Reuters' business desk, we weren't allowed to parrot press releases reporting that earnings soared 100% from the year before. Why? Because here's the reality behind some such claims: Acme Pebble's income last year may have grown from a miserable $100 to only $200. That's a 100% gain but hardly a reason to party.
And so it is with some skepticism that one encounters headlines about the price of a consumer item jumping 10%, 40% or 80% from last year. Relevant to the economic pain involved is the base from which the price rose, plus how much of the item an ordinary American actually uses. (Truffles, anyone?)
Eggs offer one such recent example. The price of eggs, we read, rose 60% last year. The number is not wrong. It's that eggs remain a relatively cheap food. At a high of $6 for a dozen, a two-egg dinner could still be had for $1.
We understand that eggs are an important food source, particularly for low-income people -- and that any increase in their price can be meaningful to some. But a hamburger at McDonald's costs $2.49.
Now, news on the tab for common consumer staples like eggs, gasoline and Thanksgiving turkeys draws attention and allows the creation of easy-to-make visuals. But so many of the headlines on the cost of eggs bang on the percentage rise in price while not mentioning the actual price.
Remember the turkey "crisis" of two Thanksgivings ago? The price of turkey hit a record $1.36 a pound for a 16-pound turkey. But you could still feed a family of 18 for a mere $1.22 a serving. Contrary to scary reports, there was no turkey shortage.
One other thing about panicky reports of price increases is that they generally fail to note that prices can also go down as market conditions change. As they say, the cure for high prices is high prices.
The price of eggs has already started to moderate as their stiffer cost has softened demand. Midwest large eggs, the commodity's benchmark, have already fallen to $4.63 a dozen, down from $5.46 last month. That's despite the persistence of the main cause of egg price inflation, an avian flu that has led to the deaths of millions of egg-laying chickens.
Some Americans tried to work around higher egg prices by obtaining their own chickens. A friend in rural Rehoboth, Massachusetts, keeps three chickens that produce about 90 eggs a month. They cost about $21 a month for a 50-pound bag of pellets. Left out, of course, is the expense of coops, fencing and the chickens themselves.
"I'll have to calculate how much it actually cost per egg," Mario Morais told me, "but I think I'm ahead of the game, and they're fresh."
It's worth noting that the sparked interest in maintaining one's own chickens started during the COVID pandemic and before egg prices shot up. People who suddenly found themselves working from home found it easier, as well as interesting, to keep chickens. That included people living in urban areas.
Feed stores in the Houston area report a strong demand for chickens and their food. And a growing number of businesses are renting out chickens. Driftwood Meadow Farms north of Houston rents chickens for four to five months at a price of $665 for two birds plus the coop, feed and water dishes. Also, the all-important instructions.
Bear in mind that cost pressures on eggs include Russia's war on Ukraine and the drought across much of the U.S. They and the avian flu all continue but the price for eggs has nonetheless started coming down. Thus, and another obsession should start to crack.