In the U.S. it has been toilet paper. In Israel, it’s eggs. They are even launching emergency airlifts.
Surging Egg Demand
Throughout Israel, supermarkets have been running out of eggs. While many have had to limit purchases to one or two dozen, some have also required a $41 or so grocery purchase to be able to buy the eggs at all.
The problem is panic buying. Typically, Israelis purchase six million eggs each day. But now, because people fear a virus lockdown, the total soared to 10 million. Those 10 million eggs exceed the 20 percent increase that usually happens before the Jewish Passover holiday that began last night. (Matzo ball recipes and the Passover Seder Plate require eggs.)
When life is normal, Israel’s chicken coops produce enough eggs. But because of the increase in demand, the Minister of Agriculture authorized emergency imports from Portugal, Italy, Ukraine, and Spain. Trying to expedite distribution, the government met a cargo ship from Spain with a fleet of trucks that helped to unload and transport them. There will even be an emergency airlift and, of course, a black market.
The United States
We too are buying more eggs.
In the U.S., demand is up but not supply (even with restaurant eggs heading to grocery stores). During the past month, wholesale egg prices tripled. At the end of March, grocers were paying close to $3.01 a dozen whereas four weeks earlier, the price was $.94. At approximately the same time, sales were up 30 percent and yet retail prices even fell slightly. Put it all together–wholesale costs soaring, sales up, retail prices down–and you can see why eggs are a seller’s problem. One grocer who could be losing money said it is tough to raise prices during a pandemic.
You can see where wholesale prices have gone:
Like Israel, some stores have begun to limit how many eggs we can buy.
Our Bottom Line: Scarcity
Because economists define scarcity as limited quantities, scarcity is everywhere. In fact, when we slice through all of the complexities of economics, we are just solving scarcity. We are figuring out how to produce and distribute a limited supply of goods and services.
With eggs though scarcity has gotten to the level of shortages. And many of us are scrambling to get enough.
My sources and more: Having just signed up for a daily Bloomberg email, I learned about Israel’s egg shortage. Happily, the perfect complement was recently in WSJ. But the best information came from the Times of Israel, here and here. And finally, always for commodities, the USDA is the best source for price info.