With supplies crimped by bird flu, retail egg prices jumped 17.8 percent in June, “the largest month-over-month increase since 1973, and are now 21.8 percent above the June 2014 levels”, said the USDA in dramatically raising its forecast of egg prices for the year. In its Food Price Outlook, the department said egg prices at the supermarket will be an average of 13 percent higher this year than in 2014, when prices set a record high. The previous forecast was a 3.5 percent increase for this year.
This spring, the worst-ever outbreak of avian influenza to hit U.S. poultry killed more than 10 percent of the hens that lay egg for human consumption. The USDA says production will fall by 5 percent this year and not recover fully in 2016. Retail egg prices are forecast to rise by an additional 3 percent in 2016.
Eggs, a good source of protein, account for a sliver of food spending, so high prices will have little overall impact on grocery bills.
The USDA scaled back its forecast for fruit and vegetable price increases to a negligible 1 percent this year despite continuing drought in California, the nation’s leader in fresh produce. “Fresh fruit prices are lower year-over-year due in part to the supply and prices of imports,” said the USDA. Compared to a year ago, fresh fruit prices are 4.7 percent lower and fresh vegetables are 0.9 percent lower.
In its first look at 2016, the USDA said it expects food inflation to hold steady at 2.5 percent, the same as this year and a tick below the 20-year average of 2.7 percent. The price of carry-out and restaurant food would rise 3 percent, but that would be outweighed by stable prices at the grocery store. Americans spend nearly 60 cents of each food dollar on food eaten at home. The USDA’s forecast assumes normal weather and yields.
Shoppers are paying an average $1.98 for a dozen Large white eggs Grade A or better at supermarkets this week, according to the USDA’s nationwide survey. That’s up 7 cents from the previous week and close to the four-week average of $2.01. A year ago, the average price was $1.70 a dozen.