U.S. bakers reel from skyrocketing egg prices amid supply crisis
USA – Retail egg prices in the U.S. surged by 15% in January, contributing to an overall 0.5% increase in consumer food prices, especially in the baking sector, according to Consumer Price Index data from the Bureau of Labor Statistics.
Other reports from Market Watch present even more troubling numbers, indicating that egg prices have surged by nearly 40% since the beginning of 2025, with the average cost of a dozen large Grade A eggs reaching US$4.95.
This spike is primarily driven by a reduction in egg supply due to recent outbreaks of highly pathogenic avian influenza (HPAI), marking the third major outbreak in the past decade.
Since the outbreak began in late 2023, millions of birds have been culled to contain the virus, significantly impacting production. States such as Iowa, Ohio, and Indiana—among the top egg producers—have reported enormous losses.
Beyond retail sales, rising egg costs have placed immense pressure on food manufacturers, particularly those relying on egg products such as dried or liquid eggs.
The price of dried whole eggs has skyrocketed to US$23.25 per pound, a staggering 272% increase from US$6.25 a year ago.
This sharp rise is straining the budgets of bakeries and food processors that depend on eggs as key ingredients. Major companies, including Grupo Bimbo and Flowers Foods, have reported increased costs affecting their production lines, primarily driven by higher costs of raw materials.
A cornerstone in baking industry
A significant portion of U.S. egg production is allocated to the ingredient market. According to the American Egg Board, in 2022, 76.5 million cases of eggs—equivalent to 27.5 billion eggs or 29% of total production—were processed into egg-based ingredients.
This reliance on egg products means industries producing cakes, cookies, bread, and other grain-based foods face steep cost increases.
For example, egg yolks now account for 63% of total ingredient costs in cake doughnut production, far surpassing flour, sugar, and shortening combined. Under normal pricing conditions, eggs would represent only 17% of ingredient expenses.
Unlike commodities such as wheat or soybean oil, dried egg products lack hedging mechanisms to mitigate price volatility.
This forces bakeries and mix manufacturers to align ingredient purchases with product sales carefully to avoid financial losses. Some suppliers are exploring egg substitutes, including plant-based alternatives like soy and pea protein-based egg replacers.
However, alternatives remain challenging due to the unique functional properties of eggs, including aeration, leavening, moisture retention, and shelf-life extension.
Manufacturers are also adjusting production processes, with some reducing egg content in recipes or reformulating products to absorb costs.
While consumers might notice the price increase in cartons of eggs at grocery stores, the broader impact is hidden in everyday baked goods and processed foods.
The American Bakers Association has warned that consumers could see higher prices for everyday goods such as bread, pastries, and breakfast without cost relief or supply stabilisation as many ingredients become more expensive.
Some food service businesses are already passing on the cost to customers, leading to increased menu prices at restaurants and bakeries.
The search for cost-effective solutions continues as the industry grapples with ongoing supply disruptions and volatile pricing.
The USDA has also announced funding to support biosecurity measures on farms to prevent future outbreaks, but recovery may take months.
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