While inflation has moderated significantly compared to 2022, many prices remain stubbornly high, and some are even rising. To the average consumer, the one item that clearly stands out is egg prices. According to the Bureau of Labor Statistics, consumers in February 2025 paid an average of almost $6 per dozen for Grade A large eggs, the highest ever in the United States: 97 percent higher than a year ago and four times as much as in February 2020. Wholesale prices of eggs climbed by roughly $2 more per dozen in the later few weeks of February to over $8 per dozen, according to the US Department of Agriculture (USDA), and consumers likely saw similar price increases (this also suggests that some retailers were selling eggs at a loss).
In response to these rising prices, several news outlets are reporting that the US Department of Justice (DOJ) is mulling an investigation of several egg producers for anti-competitive behavior. If you thought the new Republican administration was going to take a different, perhaps more market-friendly stance, on antitrust, this news may come as a surprise. Blaming “Big Egg” for the rise in prices is usually something you hear from Democratic politicians, such as Sen. Elizabeth Warren. In fact, in a January 2025 letter from her and fellow Democrats to President Trump, they called for several actions on egg prices, including using the power of the DOJ and Federal Trade Commission.
Politics, as they say, makes for strange bedfellows.
Nevertheless, you don’t need shadowy conspiracies of egg producers to understand the dynamics of egg-flation in the United States. Those same theories were trotted out in 2022–23 during the last big increase in egg prices, with many on the political left blaming a conspiracy of egg producers and corporate greed for high egg prices. That argument was wrong then, as we know, because egg prices quickly fell from almost $5 per dozen in January 2023 down to $2 per dozen in summer 2023. This change wasn’t because egg producers suddenly got less greedy: It’s because the supply shock of the major avian flu outbreaks ended.
All you need to explain the price fluctuations of eggs is good old supply and demand. Avian flu is the biggest challenge recently, with around 68 million egg-laying chickens being affected in the past year, with 44 million of those in just the prior three months (December 2024 to February 2025). The USDA also tells us that there are 378.5 million egg-laying chickens in the US, so over 11 percent of the total supply has been reduced in a very short time.
Should an 11 percent reduction in supply really lead to a roughly doubling of prices? Yes, it can. And that’s where consumer demand comes in. In other words: You, Mr. and Mrs. Consumer. Agricultural economists have found that demand for eggs, especially conventional (nonorganic) eggs is highly inelastic. That’s the term economists use to say that when the price increases, the quantity demanded won’t change much. The price can go up a lot, and consumers won’t change their behavior very much. And because so many consumers are willing to keep buying eggs as the price rises, the price has to rise a lot in response to an 11 percent reduction in supply and still have the market clear—which happens when enough buyers have decided they don’t need the good anymore.
Why don’t consumers change their behavior much in response to increasing egg prices? Again, Econ 101 provides the answers. Eggs are a classic example of a good with characteristics that make demand relatively inelastic. The biggest reason is that, for many consumption purposes, there aren’t many close substitutes for eggs. Want to bake a cake? You need eggs. Want to operate a Waffle House? You need eggs. This is not to say there are no substitutes. You can get your protein from other sources (e.g., meats), and lots of consumers might be Googling recipes for desserts that don’t need eggs. But close substitutes are hard to find. Eggs are also a small share of consumer spending (about 0.1 percent, according to the Consumer Expenditure Survey), and goods that are a small share of your budget are also price inelastic. They won’t bankrupt you if the price goes up, and it’s easier to fit price increases into your total budget.
It’s always important to remember that egg prices are set by a market. And by “market,” we don’t mean your supermarket or even farmers market. The market that sets egg prices is a commodities trading market, otherwise known as a spot market. Individual producers, even large ones, are what we call “price takers”—they just sell at whatever the current market price is. The decisions of producers on how much to produce can influence, in some ways, that market price, but ultimately the producers—just like you, as a consumer—are mostly just selling at whatever the spot market price is that day. If they tried to sell for a higher price, they wouldn’t have any buyers.
But, good news could be on the way! The latest market data show that the wholesale price of a dozen large eggs is down to $5 for the latest weekly average—still very high, but it had been up to $8 per dozen in late February and the beginning of March. The number of egg-laying chickens affected by avian flu was still high in February, but it was lower than December and January, and so far—knock on wood—the number of birds affected in March has been low. The future is impossible to predict, as always, but consumers are certainly hoping these trends will continue. Helping the situation is the Egg Producers Union of Turkey planning to export another 420 million eggs to the United States this year (those are still chicken eggs, not turkeys), the most they have ever exported to the US.
If the trends continue, not only will it mean that the proposed antitrust actions—or any other intervention like subsidies—are completely unnecessary and potentially harmful. It also means that the “five-pronged approach” that the USDA announced in late February, which includes those subsidies, is also highly unlikely to be the reason egg prices are falling, though don’t put it past them to claim credit based on the timing. That’s not to say that some of the actions the agency announced, such as allowing more egg imports (imagine that, increasing supply might temper prices!) wouldn’t be welcome, but the potential passing of the current bird flu epidemic is, in the short run, going to be the main factor impacting supply and therefore prices.