Dive Brief:

• Two years after a bout of avian influenza wiped out 34 million laying hens, the U.S. egg supply has recovered but consumer demand has not, resulting in an oversupply that’s driving egg prices to their lowest point in a decade, according to The Wall Street Journal.
• The wholesale price for a dozen large eggs in the Midwest market earlier this month was 98 cents — 62% lower than two years ago. Last month, the average consumer price for a dozen eggs was $1.33, which was 48% lower than the same point in 2015.
• Grocers are using low egg prices to drive traffic to their stores — a move that could boost overall demand, according to experts. Record low prices may also spur demand on the export market.

Dive Insight:

The outbreak of avian influenza discovered in March 2015 disproportionately struck laying hens, driving egg prices to record highs. Many supermarkets saw prices of the household staple triple in just a matter of weeks, to more than $3 for a dozen eggs.

The timing was particularly unfortunate for industry, since the growing demand for protein-rich foods had boosted egg sales to that point. Faced with high prices, many consumers rationed their egg purchasing or simply turned to more cost-effective alternatives.

"We haven't had trouble with supply because the high prices are keeping demand down," the wholesale purchasing director for Fareway Stores in Iowa told USA Today at the time.

After destroying more than 30 million birds, suppliers quickly rebounded, and by last year were back to normal production levels. But consumer demand hasn’t bounced back nearly as fast, and now farmers are facing a glut of supply and some of the lowest prices many have ever seen. Cal-Maine Foods, the highest-selling egg supplier in the U.S., recently recorded its first annual loss in more than 10 years, noting that average egg prices have dropped 42% over last year, according to the Journal.   

Although record low prices have devastated bottom lines, the situation may be reaching an inflection point that could push suppliers’ fortunes back towards profitability. Grocers eager to display a price advantage in a crowded marketplace are using record-low egg prices to drive consumer traffic to their stores. A Midwest egg supplier told the Journal that he’d recently seen Aldi stores selling a dozen eggs for 45 cents. Many retailers are leading their ad circulars with eggs priced below a dollar, and one-upping one another as they try to gain an edge on sales of what for many consumers is still a household staple.

Promoting low prices seems to be boosting demand for eggs. But grocers should also remind consumers of the uses and health benefits eggs provide. According to a recent Nielsen survey, 61% of consumers say they select their foods based on protein content. The survey also notes, as do numerous other studies, that consumers are increasingly looking to non-meat protein sources — including plants, nuts and eggs.