U.S. Egg Prices Surge Amid Avian Flu, Raising 'Eggflation' Concerns

Egg Price Hike Continues in 2025, Driving Inflation Worries in the U.S.

In the United States, egg prices have skyrocketed due to the ongoing spread of avian influenza, reigniting concerns over "eggflation" — a term combining "egg" and "inflation." According to a report by the Wall Street Journal (WSJ) on February 12, 2025, the cost of a dozen Grade A large eggs reached $4.95 in January 2025, marking a sharp 15.2% increase from the previous month and a staggering 53% rise compared to the same month in 2024.

This price surge has broken the previous record set in January 2023, when eggs were priced at $4.82 per dozen. The latest price increase is the highest monthly surge since June 2015, with eggs contributing to two-thirds of the food price rise in January 2025, according to the U.S. Department of Labor. This sudden price hike has drawn significant attention, as consumers face mounting pressure from rising food costs.

Avian Flu and Egg Supply Shortages

The primary factor driving the spike in egg prices is the continued spread of avian influenza (AI) across the U.S. In December 2024, the U.S. Department of Agriculture (USDA) reported the culling of over 13.2 million egg-laying hens, with the situation continuing into January 2025. The ongoing outbreak has severely affected the supply of eggs, especially in certain regions, leading to egg shortages in grocery stores.

As a result, some areas have experienced limited availability of eggs, and consumers are encountering challenges in purchasing this essential item. The shortage has even led to unusual incidents, such as a theft of an entire truckload of eggs in Pennsylvania.

Impact on Restaurants and Consumers

The rising cost of eggs has also affected food service establishments. Waffle House, a popular restaurant chain, began charging an additional 50 cents per egg-inclusive menu item starting February 3, 2025. This price adjustment reflects the ongoing inflationary pressures in the U.S. food industry, where eggs are a staple ingredient in many dishes.

For consumers, the soaring cost of eggs exacerbates the already high inflation rates, particularly in the food sector. The rising egg prices are contributing significantly to overall inflation concerns, particularly as the U.S. economy grapples with higher-than-expected consumer price index (CPI) numbers.

Broader Inflation and Interest Rate Expectations

The inflationary pressures, including the surge in egg prices, have fueled concerns about the Federal Reserve's ability to control inflation. According to the latest CPI data released by the U.S. Department of Labor, the consumer price index increased by 3.0% year-over-year in January 2025, primarily due to rising energy and food costs. This marks the first time in seven months that inflation has returned to the 3% range, raising concerns about whether the Federal Reserve can meet its 2% inflation target.

In light of these developments, market expectations for interest rate cuts have shifted. While financial markets initially anticipated that the Federal Reserve might reduce interest rates in 2025, the higher-than-expected inflation figures have caused speculation that the central bank may maintain or even increase interest rates. According to the CME FedWatch Tool, the likelihood of a rate cut by December 2025 is now lower than previously expected, with the probability of a rate hike becoming more likely if inflation continues to rise.

Mohamed El-Erian, an advisor to Allianz Group, commented on the situation, noting that the latest inflation data exceeds expectations and is consistent with broader economic trends. He cautioned that if the Federal Reserve is genuinely committed to achieving its 2% inflation target, it may have to consider raising interest rates instead of lowering them.

As the egg price surge continues and inflation remains a pressing issue, the U.S. economy faces complex challenges in managing both food price inflation and overall economic stability.