Note: This is a crude analysis. I’m writing this article in my personal time, not my work time - hence, rather than the high level of detail that I usually bring to my economic analyses, this is more of a back-of-the-envelope calculation. However, everything I say here is based on previous detailed research that I have done on the U.S. egg industry. The only reason I’m not going into more detail in the economics and citing sources for every statement I make is that I’m writing this in my personal time!

The price of eggs in the U.S. has been in the news lately. This website shows how the price of eggs has sharply increased since Trump took office for the second time. This popular media article argues that there are several causes—there is certainly an outbreak of the bird flu, and that article argues that there are other causes too. (Beyond actual insights, news articles from around the U.S. are competing to see who can make the worst egg puns. Surprisingly, the academic literature on the egg industry is also filled with egg puns—who said scientists aren’t fun?)

As I write this (2025-02-27), the price of eggs is 8.11 USD/dozen. This is higher than any time in the previous ten years. The next highest peak was 5.29 USD/dozen on 2022-12-26.

Eggs observe unique dynamics

Now, whenever somebody mentions the egg market, I get excited. Whenever somebody mentions the egg market in the United States, I get extra excited. I get excited because egg production in the United States is a very unique market. There are two reasons for this.

In most markets for meat and animal products around the world, products can be sourced from both domestic production (farms inside the country) and imports (farms outside the country). Events that cause domestic production to decrease can often be cancelled out by simply importing from other countries. However, this is not the case in the U.S., as the country has a very strict set of biosecurity regulations. It’s very hard for U.S. companies to import eggs from other countries. (This is true for chicken, to a lesser extent.) This means that the U.S. egg market is one of the few animal industries in the world where reducing domestic production actually causes a net decrease in the number of animals farmed. In most other animal agriculture industries, reducing domestic production (say, if the government chooses to tax farmers, or if the bird flu happens to spread through the country) might reduce the number of animals farmed in the short term, but this is quickly cancelled out by expanding imports from other countries.
Eggs have no close substitutes. Consumers faced with an unusually expensive species of fish can switch to other species of fish. Consumers faced with unusually expensive beef can buy pork instead. This is not true for eggs. (Chicken meat also has this special characteristic, though to a lesser extent—chicken meat has substitutes, but it does not have any substitutes that are cheaper than it, so higher prices of chicken often reduce net meat consumption too.)

This isn’t just an exercise in economic nerdiness—this has a life-or-death consquence. The consequence is this:

Higher egg prices means fewer animals farmed, even after accounting for consumer dynamics and imports.

That consequence holds for eggs in the United States, but for very few other industries around the world.

Eggs are horrible for animal welfare

Eggs are also very bad for animal welfare. I won’t get into the details, but on a per kg basis, eggs are one of the single products that cause the most suffering to animals. You can look into the science and maths behind this here and here. It’s hard to estimate exactly. But in terms of lives lost, shrimp, chicken, fish, and turkey seem to be worse. But if you account for lifespans, eggs looks much worse (e.g. 1.5 years for an egg-laying hen, compare to ~6 weeks for a meat chicken; fish and shrimp are more complicated mathematically as they are frequently wild-caught rather than farmed). I would certainly rather somebody eat beef, or even pork, than eggs.

Converting to cage-free production systems is certainly a massive improvement in animal welfare, but this only causes a partial decrease in the amount of suffering caused. Moreover, the United States is still at around ~75% caged egg production (source).

Some egg maths

Key market parameters

In the United States, eggs are produced for two separate supply chains: table eggs (i.e. eggs you buy in-shell in cartons at the supermarket) and breaker/processed eggs (i.e. eggs used in commercial food production). The ratio is roughly 30% for table eggs and 70% for breaker eggs.

In the United States, the own-price elasticity of demand is around -0.2 for table eggs and around -0.8 for breaker eggs. That is to say, a 1% increase in the price of table eggs will cause the demand of table eggs to decrease by 0.2%. Likewise, a 1% increase in the price of breaker eggs will cause the demand of breaker eggs to decrease by around 0.8%.

Rough calculation

Let’s assume, just for the sake of illustration, that the price of eggs in the United States increases from 3.50 USD/dozen to 8.0 USD/dozen for some time period.

This is a price increase of 4.50 USD/dozen, or around 130% relative to the original price.

If we apply those above price elasticities of demand, we can see that for table eggs, this would cause the demand of eggs to decrease by ~25%.

That is huge—that is a full one-quarter decrease in the number of eggs bought by consumers. Producers of table eggs, responding to this, would need to decrease their own production, by a full one-quarter. You’ve just knocked out a full quarter of the animal welfare burden of table egg production in the United States, at least according to this very simple calculation.

What about breaker eggs? If we multiply the numbers out, we can estimate that production would decrease by over 100%. We can’t have negative production, so clearly something is amiss here! (The problem is explained below.)

Putting this into numbers of animals, the United States has around 336 million eggs living on farms at any one time (source). This would equate to, roughly, 200 million hens slaughtered each year (as a hen lives for around 1.5 years—again, this is rough, and better calculations than this exist). Even if we take the lower elasticity (for table eggs) and apply it to the whole population, that equates to ~84 million fewer hens alive on farms at any one time, or ~50 million fewer hens slaughtered each year.

That’s crazy. For example, California recently imposed some regulations on all eggs sold in California, and this had the net effect of reducing U.S. egg production by just a couple of percent, and I count even this slight reduction among the animal advocacy movement’s greatest achievements.

Some problems with this simplistic approach:

Elasticities of demand are only accurate for small increases in price. +130% is an enormous increase in price, so applying elasticities in this way causes errors.
Producers would take some time to respond. Production cycles for egg production last 1.5 years, and some contracts and investment cycles etc last a bit longer. So producers might not be able to respond immediately, depending on their particular farming and financial circumstances.
In the case of avian flu specifically, farmers often “depopulate” (mass murder) the hens. This is frequently done in horrific ways. I won’t get into it, but it’s not a great way to die. This is an upfront animal welfare cost that needs to be incurred in order to secure the animal welfare benefit of lower production, and we need to take this seriously. I’ll only note here that depopulation methods are usually worse for animal welfare than conventional slaughter methods, but it’s uncertain whether preventing the remainder of the hen’s life (a short period of on-farm existence) is net positive or net negative for animal welfare—that’s a really hard philosophical issue that nobody has solved for certain.

But, with these caveats in mind, you see the point. The egg market in the United States is almost unique in terms of the animal welfare dynamics. Massive price increases, especially if they are sustained over a long enough time period for producers to adjust their quantity of eggs produced downwards, could plausibly be great for animal welfare—the animal welfare benefit numbers in the tens of millions of animals.

Update 2025-02-28: A friend mentioned that he heard some economist say that demand of eggs hasn’t really gone down all that much. So I want to highlight that I have not checked the demand data. I don’t think anybody has yet, as the most reliable datasets would take a bit of time (a few weeks at least) to materialise. For example, in the California policy example that I mentioned, it took a few years for the most robust analyses of that policy to be carried out and published.

It’s possible that my calculation is wrong and demand hasn’t decreased. But as long as the elasticity is about right, then demand will certainly increase by some amount. I’m not claiming that the large decrease I estimate in my simplistic calculation is correct—in this article, I mostly hope to point out that even a small but sustained decrease in demand can represent an enormous improvement in welfare by averting millions of lives worth of suffering.