What This Historic Egg Shortage Says About Supply-and-Demand for Restaurants.

While things are looking up in the restaurant world, the United States continues to experience supply chain issues in specific food categories and items. 

One such item in low-supply but high-demand for 2023: eggs. A few months ago, grocery store cases were empty of eggs, and when they were in-stock, prices were sky-high. In Colorado, it appears that balance has been restored, but the truth of the matter is, egg supply is still exceedingly low. In fact, at the start of the summer, data analysts were reporting a 17-month low for egg supply in the United States.

David Maloni, principal of Datum FS, a foodservice supply chain consultancy, reported for Nation’s Restaurant News (NRN) in May that, “Datum FS Supply Chain Stress Index fell again last month to its lowest level in over three years.” In order to chart the food supply chain accurately, “the index is made up of five foodservice supply chain components including commodity prices, freight rates, foodservice sales growth, labor inflation and various inputs from the New York Feds supply chain pressure index.” 

“One of those inputs includes the delivery times, which have improved notably in 2023,” which is why the consumer is experiencing relief in the supply-and-demand imbalance. However, eggs are still an unsteady product. “The large table egg market has fallen 70% since peaking at the end of March ahead of the Easter Holiday, and has declined to 17-month lows. The number of table-egg-laying hens remains historically small.  As of April 1, the number of table-egg-laying hens in the U.S. was the second smallest for the date since…2016,” Maloni explains.

Of course, at the same time the supply chain was stressed and egg-layers were in decline, the markets saw outbreaks of bird flu, and “more than 58 million birds died in the U.S., according to the Centers for Disease Control and Prevention,” according to Nerd Wallet’s research. “It’s the worst toll on the poultry industry since the bird flu outbreak in 2014 and 2015, which the U.S. Department of Agriculture had dubbed ‘the largest poultry health disaster in U.S. history.’ That outbreak killed an estimated 50 million birds in the roughly six months it was most deadly, the USDA said.”

The United States Department of Agriculture released statistics last week showing egg processing still down, by as much as 1.5%, according to their Egg Markets Overview. “The volume of trailer load loose egg sales this week declined 3% from last week with 28% for future delivery,” reads the report, available in full on the USDA website.

Businesses and consumers have been making the necessary adjustments to these long-term supply chain issues, to the extent that the current supply might feel like the new normal. It is important that restaurant owner-operators stay abreast of the full picture in order to shift business practices, menu prices, and operations related to ordering and food management. 

“Food commodity tracking is both a science and an art,” says Richard Weil, principal and owner of National Restaurant Consultants (NRC). “The ebb and flow of supply-and-demand is historically predictable, however, since the pandemic and unprecedented shortages, many of the historical trends are out the window.”

NRC is a team of expert restaurant consultants with decades’ worth of experience—meaning, this isn’t our first round of supply chain issues or inflation in the foodservice industry. We use our experience and our careful study of market conditions to prepare budgets and business plans built for success in any economic climate. 

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