After a summer of soaring egg prices, food businesses that depend heavily on eggs will have to decide whether to raise their consumer prices or absorb the increase a while longer.
Bird flu has wiped out 50 million chickens, many of which were egg-laying, and while the disease has subsided for now, it’s unclear whether it will return. The problem has resulted in fewer eggs, thus raising the price at the store and restaurants to buy the product.
Chris Hurt, an agricultural economist at Purdue University, said, “I’m hearing it will take ’til the spring or summer of 2016 before they’re going to really restore the 8 to 10 percent losses we had through [avian influenza].”
For Shain Buerk, owner of six area Scrambler Marie’s restaurants — whose stock and trade is breakfast and lunch items that use lots of eggs — that means possibly another six to nine months of absorbing high costs.
“The biggest concern wasn’t that we wanted to pass the cost on,” he said. “It was the way many consumers didn’t realize that prices had skyrocketed.”
Eggs that sold in January for $1.18 a dozen wholesale, jumped to $2 in May, and $2.71 by the third week of August. They have since retreated to $1.84 as of last Thursday, according to the U.S. Department of Agriculture, but Mr. Hurt said there’s no assurances they won’t bounce back up again, especially if the flu returns.
On the retail side, a dozen eggs that on average were $2.11 a dozen in January averaged $2.94 at the end of August, according to the Bureau of Labor Statistics retail pricing data. At some area stores this summer prices were more than $3 a dozen.
Jim Cowan, owner of the Original Pancake House in West Toledo, absorbed the higher costs of eggs for three months but, by the end of July, he reluctantly raised his prices. He felt it was a better alternative than adding an “egg surcharge” as he saw some other restaurants do.
“The hardest thing is it happened so quick,” he said. “At my restaurant, we don’t raise prices a lot. So when we do, people don’t complain because they know that when we do, it’s because we had to.”
At one point, Mr. Cowan said his supplier told him eggs might not be available one week this summer. “That’s scary, because we’re a breakfast place,” he said.
Jennifer Valo, owner of Next Sweet Thing bakery in Sylvania, had not been in business a year when the egg dilemma hit. At first, the problem was higher prices, then larger cases of eggs became unavailable.
“I had to go to local stores and get bigger packages of eggs. I have been doing that for a while,” she said.
Eventually, Ms. Valo also had to raise prices about a nickel an item.
“The customers really didn’t have any complaints because they were dealing with this problem themselves,” she said.
Betty Strachn, co-owner of Strachn Bakery in Toledo, hasn’t raised prices but is considering it.
“It’s made a difference in the bottom line,” she said. If eggs remain high, Strachn will start raising some prices, she added.
Nationally, the last avian flu case was in June, but there are concerns that it could return as migratory birds may spread it when they head south for the winter.
Mr. Hurt said, “The problem is it is thought to be brought by migratory wild birds. Last year those infected birds were heading north. The migration now is headed the other way, so this is a concern.”
Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.
First Published October 13, 2015, 4:00 a.m.