Where Is Our Egg Demand Going?

Like Eskimos’ many names for snow, an egg is not just an egg. It could be cage-free, free range, or pasture raised. It might be conventional or organic.

In addition, your egg could be white or brown.

Egg Demand

One egg expert said we could pay 10% or 20% more for brown eggs. A Norwich New York egg farmer told CNN that a dozen large conventional brown eggs sell for $4.50 to $6.00 whereas an organic label can elevate that price to $10. For a white egg, though, you could pay $2.50 a dozen.

So yes, we pay more for brown eggs. But it’s not for the nutrition or the taste. They cost more because brown egg laying hens need pricier upkeep. The Rhode Island Reds that lay brown eggs tend to eat more than the White Leghorn chickens that lay white eggs. How the egg tastes depends on what you feed your chickens, not the shell color.

Tracking prices, the Purdue University School of Agriculture’s Egg Dashboard confirms that conventional eggs are cheapest and pasture-raised most expensive:

Our Bottom Line: Egg Inelasticity

As economists, we can use elasticity to understand our egg behavior.

Our price elasticity of demand reflects the impact of a price change on the quantity we are willing and able to purchase. If our demand is elastic, then price matters. We demonstrate elastic demand when we buy more during a sale. On the other hand, if we want to buy the same amounts when price varies, like with medication, then our demand is inelastic.

Analytically, we are comparing the proportional change in quantity (numerator) to the proportional change in price (denominator). If the quantity’s percent change is bigger, then the item is elastic. By contrast, we have inelasticity when our denominator is larger because the percent change in price change was bigger.

Egg Price

Egg prices vary because of feed but also flu and the seasons make a difference. Recently, affecting the cost of chicken feed, record crops brought soybean and corn prices down. But then, when avian flu reduces flock size, prices go up. In addition, we always have a seasonal change impact, such as with Easter. And of course, we have inflation:

Egg Quantity

As a relatively low priced necessity with few if any nutritional substitutes, researchers tell us that egg demand is inelastic. Responding to price swings, consumers tend to buy the same number of eggs each week.

Answering our title…nowhere?

My sources and more: For egg economics, this article from Purdue University is a good place to start. Next, I was amazed that an egg dashboard— a price and trend tracker–could be so interesting. And then finally, Axios had the egg price update while CNN had the brown egg facts. (You might also return to where we began with snow and Eskimos’ 50 names.)