Egg prices are up 47%, how high will it get?

According to retail analytics firm Information Resources Inc, egg prices rose 47% in July compared to what they cost a year ago. The price of nearly every grocery item has exploded in the past year, driven by factors such as high production costs, rising fuel, supply chain hitches and more.

Why are egg prices rising?

Food and beverage inflation continues to put pressure on consumers in supermarkets, despite recent price declines in other sectors of the economy, such as gasoline. July data shows that consumer goods prices remain high in all categories. Home food prices increased by 1.4% from the end of June to the end of July and by 10.9% year-on-year from July 31.

The meat, poultry, fish and egg price index rose 13.7 percent last year, while the beef index rose 16 percent. The other major supermarket food group indices also rose last year, with grains and bakery products up 15 percent.

Higher egg and butter prices

Like eggs, the butter price also increased by 26.3% compared to last year in July and a further price increase of 3.2% from June. Food prices are up 14% year-on-year through July, according to Information Resources Inc. This is happening as food inflation continued to climb, reaching 10.9% in July, the largest increase since the record 10.4% in May 1979, according to the Consumer Price Index (CPI).

Why are egg prices so high?

The reason egg prices are soaring is one of the worst outbreaks of avian flu in the country, killing more than 30 million commercial and wild birds. The outbreak has hurt the laying hens and turkeys the most. Due to heavy losses to the poultry industry, the outbreak had reduced supplies as farmers and breeders tried to repopulate their flocks.

To encourage shoppers, retailers are increasingly turning to promotional tactics. These include weekly sales and coupons in many food and beverage categories as supply pressures ease and consumers increasingly look for the best deals.

Recent data indicates that the top five food and beverage categories where promotion has increased in the four weeks ending July 10, 2022 show close parallels to the same four weeks in 2019, pre-pandemic, with nearly 50% of sales of these top categories of promoted items.

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