Egg Prices are Historically High - Time to Re-Evaluate your Costs of Production

by Amy Barkley, Livestock Specialist, CCE SWNYDLFC Team

Bird flu outbreaks have been unprecedented in the last 9 months, leading to the depopulation of a significant portion of the nation's laying flock. As any economist will tell you, when egg supply decreases, prices increase. We've seen wholesale egg prices soar to historic highs of nearly $8.50 per dozen for conventionally produced white eggs, with retail prices in some Western New York markets nearing $10 per dozen. Eggs are sold as a loss leader in most stores, so while wholesale prices have been high, many supermarkets have been keeping the price per dozen closer to $6-$8 at the peak of this latest HPAI case spike. As a result, many consumers are feeling the pinch and turning to local egg sources due to the price differential. Consequently, small farms producing eggs have experienced unusually high demand.

With demand as high as it's been, and with prices continuing to stay high in many retail stores, now's a great time to re-evaluate your costs to produce a dozen eggs and raise your retail prices accordingly. Before diving into the specifics of input costs, it's important to remember that regularly raising prices is a smart strategy to at least keep pace with inflation. Over the past five years, the average inflation rate has been 4.5 percent, meaning that a $5 dozen of eggs from last year should be priced at $5.23 in 2025. If your price per dozen has remained $5 for the past five years, it should be $6.23 now. While the average rate of inflation has been abnormally high over the past 5 years, that doesn't mean it shouldn't be considered at its true value! In addition to inflation, farmers often experience more significant price fluctuations for certain inputs. For example, feed costs can spike due to factors like droughts, while the price of shavings has remained high since 2020. Shipping costs for consumables, such as egg cartons, have also increased. These are just a few examples, and not an exhaustive list of factors to consider.

When calculating your production costs, many farms charge based solely on their direct costs—those that directly correlate to the number of laying hens you have. These include the cost of chicks, feed, bedding, supplements, egg cartons, etc. However, relying only on direct costs can be a disservice, as it ignores other important expenses. Indirect costs are those items that are usually depreciated over a number of years, and that cost per year is spread across the whole flock. Included in this list are housing, fencing, egg fridges, and feeding/watering systems. Don't forget electricity (for heat lamps when you brood chicks), insurance, farmer's markets fees, and mileage! While these seem like small costs per hen, they do add up, especially if you're regularly traveling to pick up supplies or sell at markets.

Once you've calculated your costs per flock, you'll need to estimate how many dozens of eggs your flock will produce annually. Keep in mind that some hens will be lost to predators or disease, and not all eggs will be saleable due to cracks, rough shells, blood spots, or other defects.

The math is simple from here: divide your total costs per flock by the number of saleable dozens to calculate your cost of production per dozen. This number doesn't include labor, but we all know we need to pay ourselves for our time. To calculate labor costs, estimate the time it takes to care for your flock, pick up feed, wash/grade/pack eggs, and sell them. Multiply this time by your desired hourly rate, or the rate you pay someone else to handle this work. (For reference, minimum wage is currently $15.50 per hour.)

Once you've factored in labor, you can stop there or add a desired profit margin to the price you charge per dozen.

Eggs, like all farm products, should have their cost of production evaluated regularly—not only when prices spike. Remember, making a profit doesn't make you a bad person; in fact, it's essential for the sustainability of your farm business.

For more on producing eggs, contact Amy Barkley, Livestock Specialist at 716-640-0844 or amb544@cornell.edu.

1 Inflation statistic is based on the Bureau of Labor Statistics CPI Inflation Calculator