On Friday I was in one of the grocery stores in Ankeny, and I observed something which got me to thinking about our current situation. You see, t was the sticker shock on a carton of eggs. An 18-pack of eggs, which is normally right around three dollars, had a price tag of right around five dollars. That shocked even me. What really shocked me was the response I heard from another customer. ?Those (insert a colorful expletive) farmers! First, they get a (expletive deleted) handout for the government, and now they are charging us $5 for eggs!? We know it isn?t the farmers raking in this money, but I did have to talk with someone I knew would have a clear answer on the subject.
Audio: Agribusiness Matters 4-7-20
When it comes to eggs, Iowa is number one in production. When it comes to information on egg production in Iowa, you talk with Iowa Egg Council Executive Director Kevin Stiles. We chatted on the phone right after I got out of the grocery store, and here is what I learned. These are the answers to your questions about what is happening with egg prices in Iowa stores.
The prices are simply a matter of demand outweighing supply chain capability. Nobody could have foreseen the panic buying we have witnessed in grocery and big-box stores. We have all seen the reports that say the food supply chain will keep up and is safe. The problem is timing. It is impossible to predict when, but we are going to see the pressures come down. This is mainly going to come down to consumers and when they will stop panic buying. The longer this crazed, almost manic, mass-purchasing stops, the better off we will be. The consumers are creating this mass hysteria, by trying to store as many staples as possible.
There is plenty of supply. Most eggs produced in Iowa go to restaurants and foodservice. Those eggs are now being directed to the consumer side and grocery chains. It sounds like that should be a simple conversion, but it does take time. Farmers could increase flocks to produce more eggs. But that means more cost to producers to add on space, buy more laying hen chicks, and then there is the 20-25 week wait for the hens to be online and laying eggs.
If we have more than enough supply, why are the prices so high? Well, contrary to popular belief in some more urban stores, it is not the farmers.
The farmers are not making the money. This is the increased cost of having to make more shipments. The suppliers are having to ship more truckloads of eggs. This means more man-hours on the road. It also means more fuel and maintenance for the trucks.
This situation is our own creation. Suppliers pass the increased costs on to the stores and they pass it along to us. That is our reward for the panicked buying. We, as consumers, created a large chunk of this mess, so we need to be ready to accept responsibility.
However, if you feel there is an instance of price-gouging that should be investigated, report it to the Iowa Attorney General Tom Miller?s Office.
