Gasoline, rent, insurance, even toilet paper. Nearly everything we buy has been impacted by the inflation of the past two years. But nothing has captured as much media attention as the ultimate insult to all-night breakfast-lovers: an egg surcharge at Waffle House. That does it.
The restaurant chain says it has been forced to respond to the spiraling cost of whole eggs. But instead of raising prices generally, the company has chosen to apply what it hopes will be a temporary 50 cent surcharge per egg until costs begin to normalize.
Patrons may have a long wait.
Generalized inflation and seasonal demand over the holidays have contributed, but by far the biggest factor driving egg prices to record levels is the resurgence of a viral outbreak among the nation’s flock of egg-laying hens.
The H5N1 avian influenza virus is primarily found in wild birds, especially waterfowl like geese and ducks, which can then infect commercial hen flocks. The virus is easily transmitted, and results in an 80%-90% fatality rate once contracted by chickens, requiring that entire flocks be destroyed if a single case is detected.
Omelet lovers may recall that this strain of avian flu first appeared in 2022, necessitating the culling of millions of laying hens to stem the transmission. But another, more rapidly spreading outbreak began early in 2024 and accelerated around year-end.
According to data from the U.S. Department of Agriculture, over 150 million birds have been destroyed since 2022, including 23 million hens, roughly 10% of the entire U.S. commercial flock, during the past month alone. This unprecedented reduction in the number of producing hens has created a shortage and driven the average price up by 300% since 2021.
Complicating the sharp decline in laying hens is the substantial time lag associated with replacing the lost stock. It takes about 24 to 30 weeks for a bird to reach full maturity and produce large eggs. In addition, hatching chicks is naturally seasonal, with most of the new stock hatched in the spring. Even once the flu recedes, it will take time to get back up to full production.
The bird infestation explains the current shortage and price spikes, but there is another, possibly more alarming, aspect to the current outbreak. The virus has unexpectedly crossed over from poultry to dairy cattle. The migration from fowl to mammals has health officials concerned that human cases may accelerate. So far, there have been 68 reported cases of human bird flu infection, including one death in Louisiana. Scientists believe that about two-thirds of the human cases came from cattle.
One critical role of government is to track disease threats that may arise in other parts of the world and channel resources to research effective prevention and treatment measures against new viruses. So it was met with considerable concern when the new administration announced the termination of the government’s international bird flu surveillance program.
The U.S. Agency for International Development was responsible for tracking cases of the avian influenza in 49 countries, a critical element of the America’s efforts to stave off a more dangerous outbreak. Elon Musk, under the direction or implied permission of the president, has halted all the agency’s health and humanitarian activities, recalled and furloughed all employees and terminated access to previously collected data.
While the United States has so far reported only one human death from the H5N1 virus, a far more deadly strain with a fatality rate of nearly 50% is circulating outside the U.S. that will require robust monitoring. It is not known when or how such critical data collection will resume.
The president also announced the end of U.S. membership in the World Health Organization, depriving scientists at the Centers for Disease Control and Prevention of access to the organization’s extensive data collection and reporting of infectious diseases, including avian flu, that might be approaching our shores.
Concurrently, the White House is in the process of dismantling the Office of Pandemic Preparedness and Response, an agency created in the aftermath of COVID-19 tasked with formulating plans for confronting the next pandemic and which has been actively engaged in addressing the alarming spread of bird flu. The previous Trump administration scrapped a similar working group inside the National Security Council and discarded its comprehensive pandemic response plan in 2018 on the cusp of the COVID-19 outbreak.
The avian flu threat is further complicated by the division of responsibility among the various agencies of jurisdiction including the Department of Agriculture, the CDC and the Food and Drug Administration, each of which is currently beset with personnel and funding uncertainty.
As for egg prices, both the progression of the infestation and shift in demand are hard to estimate, but don’t expect too much relief in the short term.
The U.S. Department of Agriculture said in its annual forecast that egg prices could rise another 20% during 2025. Prices are so high that even the crooks are paying attention. State troopers in Pennsylvania reported the theft of 100,000 eggs from an organic producer in Greencastle, Pennsylvania, reportedly worth about $40,000. How does one go about fencing 8,000 cartons of Grade A cage free eggs?
Meanwhile, watch for a new menu item at Waffle House: BYOE. Or maybe by Easter we can search for the egg that isn’t golden. It might be more valuable.
Christopher A. Hopkins, CFA, is co-founder of Apogee Wealth Partners in Chattanooga.