The Economic Ripple Effects of the 2025 Global Egg Shortage

The Economic Ripple Effects of the 2025 Global Egg Shortage

Introduction

In 2025, a global egg shortage has disrupted one of the world’s most essential food staples, sending prices soaring and leaving grocery shelves empty. This crisis, driven by a deadly avian influenza outbreak and compounded by supply chain challenges, has far-reaching economic implications. From consumers struggling with higher grocery bills to producers navigating losses or windfall profits, the shortage is reshaping economies worldwide. This article explores the causes, impacts, and future outlook of the 2025 egg shortage, shedding light on its complex economic dynamics.

Causes of the Global Egg Shortage

The primary driver of the 2025 egg shortage is the highly pathogenic avian influenza (HPAI), specifically the H5N1 strain. Since early 2022, this virus has led to the culling of over 166 million birds globally, with 54 million lost in the past three months alone (USDA). In the U.S., 13.2 million commercial egg-laying hens were culled in December 2024, contributing to a total of 139 million birds lost since the outbreak began (CBS News). This massive reduction in egg-laying hens has significantly curtailed egg production, creating a supply shock felt worldwide.

Beyond avian flu, other factors have worsened the shortage. Supply chain disruptions, including a shortage of truck drivers, have increased shipping costs and delayed deliveries, making it harder for eggs to reach consumers (CBS News). Policy changes, such as cage-free egg mandates in states like California, Colorado, and Massachusetts, have added production challenges. These laws, aimed at improving animal welfare, require costly transitions that have strained supply, particularly during the avian flu outbreak (NerdWallet). Seasonal demand spikes, especially during holiday periods, have further exacerbated the scarcity.

Economic Impact on Egg Prices

The egg shortage has driven unprecedented price increases, with significant economic consequences. In the U.S., the average price for a dozen large, grade-A eggs reached $4.15 in December 2024, a 60% increase from $2.51 a year earlier and a 160% jump from $1.41 in 2019 (CBS News). By January 2025, prices surged another 15%, reaching nearly $5 per dozen, contributing to higher-than-expected inflation (Bloomberg). The USDA predicts a further 20% price increase in 2025, signaling ongoing economic pressure (USDA Food Price Outlook).

Globally, similar trends are evident. In the UK, egg prices have risen sharply, with supermarkets like Tesco limiting purchases to manage demand (The Guardian). These price hikes affect not only consumers but also industries reliant on eggs, such as bakeries and food manufacturers, which face higher production costs. The surge in egg prices has also contributed to broader inflationary pressures, as food costs play a significant role in consumer price indices.

Impact on Consumers

The egg shortage has hit consumers hard, particularly low-income households who rely on eggs as an affordable protein source. With prices soaring, many are forced to seek alternatives like plant-based proteins or reduce egg consumption altogether. This shift can impact nutrition, as eggs are a key source of protein, vitamins, and minerals. For example, 94% of Americans expressed concern about rising food costs in 2024, a sentiment likely intensified by the egg shortage (The Guardian).

Restaurants and bakeries are also struggling. Establishments like Montague Diner in Brooklyn, New York, which uses eggs in 40-50% of its menu items, are absorbing higher costs to avoid raising prices for customers (CBS News). However, this strategy may not be sustainable, potentially leading to higher menu prices or reduced offerings. Some grocery stores are selling eggs at a loss to attract customers, relying on profits from other items to offset the cost (CBS News).

Impact on Producers

Egg producers face a dual reality: devastating losses for some and record profits for others. Small-scale farmers who have lost flocks to avian flu are grappling with significant financial setbacks. Replacing culled hens takes 19-20 weeks for new birds to start laying eggs, and full farm recovery can take up to a year (Newsweek). This prolonged recovery period strains smaller operations, many of which lack the resources to weather the crisis.

Conversely, large producers like Cal-Maine Foods have capitalized on the shortage. In fiscal year 2023, Cal-Maine reported a sevenfold increase in gross profit compared to 2021, paying out $250 million in shareholder dividends—40 times more than the previous year (The Guardian). The company sold 7% more eggs in 2024 than in 2021, with profits tripling over the same period, highlighting the uneven economic impact within the industry.

Market Structure and Corporate Consolidation

The egg industry’s highly concentrated structure has amplified the economic effects of the shortage. The top five egg companies in the U.S. control 46% of egg-laying commercial hens, with Cal-Maine alone owning 75% more hens than its nearest competitor (Cal-Maine Investor Presentation). This consolidation allows large producers to influence prices significantly. For instance, Cal-Maine sold conventional eggs at 2.8 times the price of 2021, pocketing nearly $1 more per dozen, while consumer prices rose 61% in six months ([The Guardian](https://www.the guardian.com/environment/2025/mar/04/egg-prices-bird-flu-corporate-profits)).

Critics, including organizations like Farm Action, argue that this market structure enables price gouging. They have urged antitrust investigations, noting that price increases exceed what would be expected from hen losses alone (Farm Action Letter). Lawmakers like Ro Khanna and Elizabeth Warren have also called for probes into potential profiteering (Warren Letter). The concentrated market not only affects pricing but also raises concerns about the resilience of industrial farming systems, which may exacerbate the spread of diseases like avian flu.

Global Perspective

While the U.S. is a focal point of the egg shortage, the crisis is global. In the UK, avian flu and Brexit-related supply chain disruptions have led to empty shelves and purchase limits in supermarkets (The Guardian). Canada has reported similar issues, with calls for enhanced biosecurity measures to curb avian flu outbreaks (Canadian Food Inspection Agency). In Europe, stricter animal welfare laws, such as those promoting cage-free production, have added to supply constraints, mirroring challenges in the U.S. (European Commission).

The global nature of the shortage highlights shared vulnerabilities in poultry production and supply chains. Regional factors, such as regulatory changes or trade disruptions, compound the issue, creating a patchwork of shortages and price spikes across countries.

Future Outlook

The future of the egg market remains uncertain, with recovery likely to be slow. The USDA has adjusted its 2025 production forecasts downward, suggesting that supply losses may persist (USDA Food Price Outlook). Experts estimate a 6-9 month timeline for farms to recover, as new hens take time to mature (Newsweek). However, efforts to address the crisis are underway. The USDA has allocated $1 billion to enhance biosecurity, replace lost birds, and explore poultry vaccinations, though challenges remain, as vaccinations can complicate chicken exports (NPR).

The shortage has also sparked interest in alternative production methods, such as backyard chicken farming, which offers a more resilient approach to egg supply (High Plains Journal). Long-term solutions may involve diversifying supply chains, improving biosecurity, and addressing market consolidation to create a more robust egg industry.

Conclusion

The 2025 global egg shortage is a multifaceted economic crisis, driven by avian influenza, supply chain disruptions, and market dynamics. Consumers face higher prices, restaurants struggle with costs, and producers experience both losses and windfall profits. The concentrated egg market has raised concerns about price gouging, prompting calls for regulatory scrutiny. Globally, the shortage underscores vulnerabilities in food systems, with recovery likely to take months.

As we navigate this crisis, it’s clear that building resilience in our food supply chains is critical. Whether through vaccinations, diversified production, or policy reforms, addressing the root causes of the shortage will be essential to prevent future disruptions. For now, consumers, producers, and policymakers must work together to weather the economic ripple effects of the 2025 egg shortage.