Egg prices soar as outdated supply chains crack under pressure

So when the price of eggs rose over 40% from 2024 to 2025, it became a headline news story in Colorado and across the nation.

Public officials and the media blamed high egg prices on bird flu outbreaks and said containing the outbreak in supply chains would lower prices. In early March 2025, egg prices fell in the U.S., but these trends are likely to reverse due to higher seasonal demand during Easter and Passover.

Rising prices and market volatility have led to food costs climbing to 11.4% of American’s disposable income, the largest percentage since 1991.

Arresting these rising costs, as I argue in my 2023 book, means reinventing supply chains to address the growing supply, demand and price volatility that has created uncertainty for consumers since the COVID-19 pandemic of 2020.

I have described global supply chains, and supply chains in the U.S. in particular, as “efficiently broken.” By this I mean that they aspire to offer low prices from economies of scale but lack sufficient resiliency to create stability.

Cage-free eggs

Colorado faces a double whammy where egg prices are concerned.

It’s one of nine states with a cage-free egg mandate, which requires all eggs sold in the state to come from cage-free facilities. The regulation has been shown to increase the price of eggs by as much as 50%.

Over the past two decades, cage-free egg laws have been passed in states as consumers have grown more concerned with the welfare of farm animals. What that means varies from state to state because the term cage-free isn’t regulated by a federal agency. In Colorado, egg-laying hens must be housed in a cage-free system and must have a minimum of 1 square foot of usable floor space per hen.

Colorado is the 28th largest egg producer in the U.S., far behind Midwestern states such as Iowa, Indiana and Ohio, but it has a few large producers such as Morning Fresh Farms, as well as smaller ones such as the Colorado Egg Producers Association, a collection of seven family-owned farms.

Colorado’s cage-free egg law went into effect in January 2025 – around the same time that consumers noticed bare egg shelves at their supermarkets. Many consumers and some elected Republicans in Colorado blamed the cage-free law.

Nevada is pulling back on its cage-free egg mandate to deal with the challenge of unaffordable egg prices.

But cage-free laws are not the main driver of increasing egg prices, as I’ve noted in my research. Like many others, the egg supply chain needs to be reinvented to balance price, scale, resiliency and stability.

Supply chain issues

What is driving up the prices of eggs and other consumer goods is the concentration of producers. The COVID-19 pandemic revealed just how vulnerable prices and supply chains are.

Five years ago this month, when the pandemic started, many products became unavailable and more expensive.

In 2022, a major product recall of Similac led to a baby formula shortage in the U.S. The baby formula market is highly concentrated, with four companies responsible for approximately 90% of the domestic market. A large-scale facility that produced the baby formula was found to have unsanitary conditions and contaminated products. Pulling this one facility offline at the same time the nation was coping with pandemic-related supply chain issues led to the shortage.

Then at the beginning of 2024, supplies of insulin ran short due to production issues at Eli Lilly, one of the three companies responsible for over 90% of the U.S. insulin market.

And in the second half of 2024, hospitals couldn’t get enough IV fluid due to damage caused by Hurricane Helene to a Baxter factory in North Carolina that manufactures approximately 60% of IV fluids in the U.S. This factory had been relocated to North Carolina from Puerto Rico due to the supply impact from Hurricane Maria that damaged the island in 2017.

In all of these cases, the supply chain was easily interrupted due to a reliance on a few large producers. In 2025, bird flu and eggs are just another example of America’s “efficiently broken” supply chain.

Bird flu and cost of eggs

In the U.S., the top five egg producers are responsible for 40% of hens, with Mississippi-based Cal-Maine Foods alone responsible for 13% of total U.S. production.

An average-sized production facility in the U.S. can house 75,000 to 500,000 hens. Large facilities can house over 4 million. The mass production of eggs from these facilities means eggs are, in stable times, cost effective for the American consumer. Prior to the COVID-19 pandemic, eggs in the U.S. never surpassed $3 a dozen, and it was an affordable food solution compared with processed foods.

But this scale and efficiency comes at the price of resiliency during something like a bird flu outbreak. Larger farms create a higher risk of viral outbreak, which leads to the need for culling millions of birds and a heightened risk of viral replication and mutation.

The solution may increase prices

Policymakers want to reduce the spread of disease at American egg factories to mitigate the spread of bird flu. But these measures are expensive.

Factory farms increase the potential for viruses to spread rapidly and even mutate. Therefore, bird flu is a more serious precursor of supply chain disruption than a hurricane or product recall because it has the potential to create a public health crisis.

One solution to limit the spread of bird flu is to regulate the number of hens allowed in a single facility. This would lead to smaller and more farms across the U.S., but also higher consumer prices.

This solution would mirror other countries such as Canada, where the average facility size is much smaller than in the U.S. and eggs and poultry cost significantly more. That’s why – under the terms of the United States-Mexico-Canada Agreement – Canada has quota and tariff protection from American companies flooding its market with eggs and poultry that would cost consumers two to three times less.

Yet in March 2025, the price of eggs in Canada is 50% cheaper than eggs in the U.S. because the country has not suffered the same damages from bird flu.

Following Canada’s lead wouldn’t result in egg prices as low as giant factory farms, but it would protect American consumers from the periodic price shocks caused by disease or localized weather events that disrupt supplies.

Despite the threat of a public health crisis, American consumers don’t want to pay more for eggs – and their leaders have promised they won’t have to.