{"id":162,"date":"2025-06-18T13:36:53","date_gmt":"2025-06-18T17:36:53","guid":{"rendered":"https:\/\/people.bsu.edu\/econbriefs\/?p=162"},"modified":"2025-06-18T13:36:53","modified_gmt":"2025-06-18T17:36:53","slug":"the-economics-of-eggs-by-dr-cecil-bohanon-and-dr-john-horowitz","status":"publish","type":"post","link":"https:\/\/people.bsu.edu\/econbriefs\/2025\/06\/18\/the-economics-of-eggs-by-dr-cecil-bohanon-and-dr-john-horowitz\/","title":{"rendered":"The Economics of Eggs \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz"},"content":{"rendered":"

Originally written on 3\/4\/2025<\/em><\/p>\n

Markets are amazing. They do not always give everyone their heart\u2019s desire, but they work. Recent events in the market for eggs demonstrate their efficacy. According to the Centers for Disease Control (CDC), <\/span>\u201chighly pathogenic avian influenza (HPAI) A(H5) viruses\u201d<\/span><\/a> have led to the death of over 166 million birds since January 2022. The most elementary economic analysis indicates this reduces the supply of eggs and puts upward pressure on prices. This is confirmed in the data. National egg prices rose from an inflation-adjusted $2.18 per dozen in January 2022 to $4.95 in January 2025. This contrasts with an average real price of $1.85 per dozen in the 36-month period before January 2022.\u00a0<\/span>\u00a0<\/span><\/p>\n

The increase in price serves two vital functions. First, it rations increasingly scarce eggs among competing users. If fewer eggs are around, some mechanism must be in place to determine who does and does not get the diminished quantity. Tedious, contentious, and complicated mechanisms could be implemented where government panels or agencies determine which consumers are \u201cmost worthy\u201d of eggs. Consumers themselves could literally fight it out for the eggs, although we suspect lots of eggs would be broken in the process. Instead, rising prices sort out those willing and able to pay for the limited stock of eggs from those who are not. Consumers grumble at the higher prices, but whether they want to pay or not is their choice. They need neither a political connection, a silver tongue, nor a silver bullet to procure eggs, just sufficient cash, as crass as that may appear.<\/span>\u00a0<\/span><\/p>\n

Second, as \u201cunfair\u201d as it may seem, higher prices enrich those lucky egg producers whose flocks have been spared the viral outbreak. It may seem untoward for fortunate producers to gain from the misery of others, but it gives them the incentive and financial wherewithal to rev up their egg production to the benefit of consumers. In addition, it attracts new producers to the market and new egg sources to be developed and tapped.\u00a0<\/span>\u00a0<\/span><\/p>\n

How high will egg prices go? We don\u2019t know. We doubt anyone can say for sure. There is some consolation that despite today\u2019s high prices, the <\/span>long-run trend in inflation-adjusted egg prices<\/span><\/a> has been towards lower prices.\u00a0 Increased productivity in the industry has lowered costs. In <\/span>December 1918, eggs sold<\/span><\/a> for 75 cents a dozen. Inflation-adjusted, that comes to $14.14! We bet they won\u2019t be that expensive in March 2026.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Originally written on 3\/4\/2025 Markets are amazing. They do not always give everyone their heart\u2019s desire, but they work. Recent events in the market for eggs demonstrate their efficacy. According to the Centers for Disease Control (CDC), \u201chighly pathogenic avian influenza (HPAI) A(H5) viruses\u201d have led to the death of over 166 million birds since […]<\/p>\n","protected":false},"author":112,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[462],"tags":[1554,1551,1232,1219,606,1555,272,7,1556,910,1557,1553,738,1552],"class_list":["post-162","post","type-post","status-publish","format-standard","hentry","category-microeconomics","tag-agricultural-economics","tag-avian-flu","tag-consumer-behavior","tag-economic-history","tag-egg-prices","tag-food-supply","tag-incentives","tag-inflation","tag-market-response","tag-markets","tag-price-rationing","tag-price-signals","tag-production","tag-supply-and-demand"],"yoast_head":"\nThe Economics of Eggs \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/people.bsu.edu\/econbriefs\/2025\/06\/18\/the-economics-of-eggs-by-dr-cecil-bohanon-and-dr-john-horowitz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Economics of Eggs \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs\" \/>\n<meta property=\"og:description\" content=\"Originally written on 3\/4\/2025 Markets are amazing. 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