High Egg Prices Could Ruffle the Feathers of U.S. Food Manufacturers, Grocers, and Consumers

In February 2025, the average price of a dozen grade A large eggs cost U.S. consumers $5.90, nearly $1.00 more than in January and almost double the price in February 2024. Driving the high prices are supply drastically reduced by avian flu and inflationary pressures on egg producers' input costs. These factors, combined with the expected surge in demand in the weeks ahead of Easter and Passover, could cause egg prices in the U.S. to remain at historically high levels in the near term.

-- With no avian flu outbreaks confirmed in the past two weeks, constraints on supply and the knock-on effect on egg prices appear to be easing as wholesale prices have dropped.
-- The U.S. Department of Agriculture's $1.0 billion plan to reduce egg prices includes longer term strategies such as investments in biosecurity measures and vaccine research as well as temporary options for importing eggs.
-- As prices have risen, consumer demand for eggs has declined since beginning of the year.
-- The scrambled market dynamics could have a varied effect on the volumes, EBITDA, and operating cash flow of U.S. manufacturers of egg-containing food products, grocers, and restauranteurs.

"While scrambling market dynamics could create considerable near-term volatility and earnings pressures for large and small companies alike, we believe any material adverse effect on the long-term credit risk profiles of most large and well-diversified food manufacturers, grocers, and restauranteurs in the U.S. will be limited in the near term," said Aarti Magan, Vice President, Corporate Ratings. "Conversely, smaller companies that are dependent on just a few egg suppliers may experience significant supply chain pressures. Furthermore, changing consumer behavior could have a more pronounced effect on these specialist, smaller-scale, and less geographically diversified companies with narrower product offerings."