Why are Eggs so Expensive in 2025? Key Causes and Solutions

In early 2025, egg prices hit a staggering $5.90 per dozen, a record high that’s sending shockwaves through the food manufacturing industry. For businesses dependent on eggs as a key ingredient, this price surge isn’t just newsworthy; it’s an existential challenge threatening product formulations, profit margins, and production schedules. As ingredient costs continue climbing, manufacturers need more than explanations about why eggs are so expensive; they need actionable solutions.

Since 1987, we’ve been helping food manufacturers navigate ingredient challenges. While consumers feel the pinch at grocery stores, businesses face an even more complex challenge: reformulating products while maintaining quality, managing cost increases, and ensuring consistent supply. This article examines why eggs have become so prohibitively expensive and offers practical alternatives and strategies specifically for food manufacturers.

Understanding Why Eggs Are So Expensive in 2025

The current egg price crisis represents more than just typical market fluctuations. According to the Bureau of Labor Statistics, the average cost of a dozen Grade A large eggs reached $5.90 in February 2025, nearly triple the price from just two years ago. This follows January’s record-breaking $4.95 per dozen. Some regions are experiencing even higher prices, with reports of eggs selling for $9-10 per dozen in California and other western states.

This dramatic increase isn’t uniform across all markets. Manufacturers in the Midwest are seeing somewhat lower prices than those on the coasts, though no region has escaped significant increases. The timeline of price escalation shows a clear pattern: after a brief period of stabilization in mid-2023 when prices dropped to around $2.04, costs began climbing again in late 2023 and have accelerated dramatically since October 2024.

Root Causes of the Egg Price Surge

Several interconnected factors explain why eggs are so expensive right now:

Bird Flu Outbreak: The H5N1 avian influenza virus has devastated egg-laying flocks across the country. Since February 2022, bird flu has affected approximately 166.2 million birds in the U.S., with about 130 million egg-laying hens affected. When outbreaks occur, entire flocks must be culled per USDA policy, dramatically reducing supply. The outbreak began in early 2022, and since October 2024 alone, outbreaks across multiple states have affected more than 52 million egg-laying hens. The Associated Press reported that all the birds in affected facilities must be destroyed to prevent further spread of the highly pathogenic avian influenza.

Regulatory Changes: Eight states—Arizona, California, Colorado, Massachusetts, Michigan, Nevada, Oregon, and Washington, now have laws prohibiting conventional egg production, requiring cage-free facilities. These regulations, while improving animal welfare, have contributed to higher production costs and greater vulnerability to bird flu outbreaks since cage-free facilities often allow more contact with wild birds. Major retailers like Trader Joe’s have also committed to cage-free eggs, further constraining the conventional egg supply.

Rising Production Costs: Feed prices have increased significantly, driven by grain shortages and higher energy costs. Labor, transportation, and packaging costs have also risen, adding pressure throughout the supply chain. Farmers are also facing demands for higher wages, which the Department of Agriculture notes have increased the cost of egg production by nearly 15% compared to the previous year.

Market Concentration: The egg industry is highly concentrated, with the top producers controlling significant market share. This concentration can amplify supply disruptions when major producers face challenges. The Department of Justice has recently launched an investigation into whether large egg producers have conspired to set high prices or limit supply. President Donald Trump touched on the issue of egg prices during a recent address to Congress, promising action to help American consumers with their personal finance challenges due to food inflation.

How Rising Egg Prices Are Affecting Food Manufacturers

The impact of expensive eggs extends far beyond grocery shoppers. Food manufacturers face distinct challenges that threaten their entire business model. Production costs for egg-dependent products have skyrocketed, with some manufacturers reporting 30-40% increases in ingredient costs for products where eggs constitute a significant component.

Profit margins, already thin in many food categories, are being compressed to unsustainable levels. Manufacturers face difficult choices: absorb the increased costs (potentially operating at a loss), pass costs to consumers (risking reduced sales), or reformulate products (requiring R&D investment and potential quality changes).

Contract disruptions present another challenge. Many manufacturers operate on fixed-price contracts with retailers or distributors but face variable costs from suppliers. As egg prices fluctuate dramatically, these pricing models become untenable. Supply reliability also remains unpredictable, with some manufacturers reporting delayed shipments, partial fulfillment, or canceled orders as suppliers invoke force majeure clauses.

Grocery stores have begun implementing purchase limits on eggs in many regions, with shoppers facing empty shelves in the egg section. This creates additional business challenges for food manufacturers who must compete for limited supplies against consumer demand. The Federal Reserve has noted that food inflation, particularly egg prices, could influence interest rates and broader economic policies during the same period of recovery from other inflationary pressures.

Industry-Specific Challenges and Vulnerabilities

Different sectors of the food industry face unique challenges from expensive eggs:

Bakery Sector: Cake mixes, cookies, and commercial bread producers rely heavily on eggs for structure, texture, and moisture. One Midwest bakery reported that egg ingredients now represent 22% of their total ingredient costs, up from 8% just two years ago. With consumers continuing to eat baked goods despite economic pressures, manufacturers must find ways to maintain quality while managing costs.

Prepared Foods: Manufacturers of ready-to-eat meals, pasta, and frozen foods use eggs as binding agents and protein sources. These products often operate on razor-thin margins, making them particularly vulnerable to ingredient cost increases. Many businesses in this sector are actively seeking new suppliers or alternative ingredients to remain competitive.

Confectionery and Desserts: Ice cream, custards, and dessert manufacturers depend on eggs for emulsification, aeration, and texture. A national ice cream manufacturer recently shared that their premium custard-based formulations now cost 35% more to produce than in early 2023. Food items in this category face particularly challenging reformulation requirements when reducing egg content.

Dressings and Sauces: Mayonnaise and dressing producers use eggs as crucial emulsifiers. One regional manufacturer temporarily suspended selling their signature aioli product due to prohibitive egg costs. Increased demand for ready-to-use sauces has coincided with this price rise, creating a particularly difficult business environment.

Effective Alternatives to Eggs for Food Manufacturers

While the challenge is significant, food manufacturers have viable options for replacing or reducing egg content while maintaining product quality. The key lies in understanding the specific functional properties that eggs provide in your formulation and finding suitable alternatives.

The cost impact varies based on the application and specific alternatives chosen, but most manufacturers implementing these substitutions report significant savings while maintaining acceptable product quality. Many food manufacturers report that consumers who eat their products don’t notice the difference when reformulations are properly executed.

Sweetener-Based Egg Replacements

Specialized sweetener formulations offer particularly effective egg replacement options for many applications. These solutions go far beyond simply adding sweetness, providing functional properties that can replace eggs in many formulations:

Modified corn syrups with specific dextrose equivalents can effectively replace eggs’ binding properties in many baked goods. These specialized syrups create the right texture without introducing off flavors. In one real-world example, a national cookie manufacturer reduced egg usage by 60% by incorporating a custom corn syrup blend, saving nearly $350,000 quarterly in ingredient costs.

Specialty sugar blends combining various carbohydrate profiles can replace eggs’ moisture retention capabilities. These blends maintain product freshness while reducing dependence on volatile egg markets. A southeast bakery implemented this approach in their muffin line and reported not only cost savings but improved shelf life.

Functional sweetener systems can replicate eggs’ structural contributions to cakes and breads. These systems, often combining different carbohydrate sources with minimal processing aids, maintain volume and crumb structure. When properly formulated, consumers typically cannot detect the difference in finished products. Money saved through these reformulations often exceeds 20% of ingredient costs for many bakery applications.

Reformulation Strategies for Different Product Categories

Successful reformulation requires a systematic approach tailored to your specific product category:

For baked goods, start by analyzing the specific functional roles eggs play in your formulation. In many cases, eggs provide multiple functions, requiring a combination of alternatives. Begin with small batch testing, focusing first on maintaining structure before fine-tuning flavor and appearance. Incremental egg reduction often works better than a complete replacement, allowing you to decrease costs while maintaining familiar production processes.

For dressings and sauces, emulsification is typically the primary function. Plant-based emulsifiers combined with stabilizing systems can replace eggs while maintaining appropriate viscosity and mouthfeel. Production processes may require adjustment, particularly regarding mixing protocols and temperature controls. Many manufacturers find that high-shear mixing becomes more important with egg alternatives.

For frozen desserts, focus on replicating the smoothness and mouthfeel that egg proteins provide. Specialized hydrocolloid blends combined with protein sources can maintain the premium sensory experience consumers expect. Processing adjustments, particularly freezing rates and storage temperatures, may need optimization when using egg alternatives.

The increased demand for more eggs in food formulations has driven innovation in this space, with companies seeking ways to create products that still appeal to consumers who eat traditional and familiar foods but with less dependency on volatile ingredients.

Building Resilience Against Ingredient Price Volatility

Beyond immediate reformulation, food manufacturers need long-term strategies to build resilience against future ingredient volatility:

Diversifying ingredient sources should be a priority. Depending on a single ingredient category creates vulnerability to supply disruptions and price fluctuations. Developing formulations that can accommodate different ingredient systems provides valuable flexibility during shortages or price spikes. Progressive manufacturers maintain “emergency formulations” that can be rapidly deployed when primary ingredients become prohibitively expensive.

Contract strategies also need reconsideration. The traditional annual fixed price model becomes problematic during periods of high volatility. Consider implementing swing pricing mechanisms that allow limited adjustments based on market conditions, or explore risk-sharing agreements with suppliers and customers that distribute the impact of major market movements.

For inventory management, the just-in-time approach that dominated the past decade may need recalibration. For critical ingredients with volatile prices, consider building strategic reserves during favorable market conditions. The carrying cost may be justified by protection against extreme price spikes or supply interruptions.

Risk assessment frameworks should incorporate ingredient volatility as a key factor. Develop comprehensive contingency plans for your most vulnerable ingredients, incorporating alternative suppliers, reformulation options, and communication strategies for customers.

Working with Ingredient Specialists to Navigate Shortages

Partnership with ingredient specialists provides significant advantages during market disruptions. They offer more than just products – they provide expertise in reformulation, access to specialized ingredients, and market intelligence that helps manufacturers adapt quickly.

Custom formulation services can develop egg alternatives specifically designed for your applications, often achieving better results than generic solutions. These tailored approaches consider your specific processing equipment, quality standards, and cost targets to optimize results. Several major manufacturers have successfully navigated the egg crisis by collaborating with ingredient specialists on custom formulation projects.

R&D collaboration opportunities extend beyond immediate needs. By working with ingredient specialists on ongoing development projects, manufacturers can create more adaptable formulations that withstand future market disruptions. This proactive approach builds flexibility into products before crises occur.

Just in time, alternative recommendations from ingredient specialists can help during sudden supply disruptions. These specialists often maintain relationships with diverse suppliers and can quickly source replacements when primary ingredients become unavailable or prohibitively expensive. Finding new suppliers for conventional ingredients has become increasingly challenging as the poultry industry adjusts to ongoing outbreaks.

What to Expect for Egg Prices and Alternatives in 2025-2026

Current projections suggest egg prices will remain elevated throughout 2025, with potential incremental improvement in late 2025 as flock reconstruction efforts progress. However, the underlying vulnerability to bird flu outbreaks will persist, creating ongoing volatility rather than a return to previous price levels.

The USDA has implemented a $1 billion plan to combat bird flu and stabilize egg prices, but these measures will take time to impact the market. Meanwhile, regulatory pressures continue pushing the industry toward cage-free production, which carries higher costs and greater vulnerability to disease outbreaks.

For food manufacturers, this outlook underscores the importance of developing long-term alternatives rather than waiting for market correction. Investments in reformulation now will protect against future volatility and potentially create permanent cost advantages.

On the positive side, ingredient technology continues advancing rapidly. New egg alternatives using emerging technologies like precision fermentation show promise for providing functional equivalence at lower costs, though commercial availability remains limited. Manufacturers should monitor these developments and prepare for implementation when they reach commercial scale.

Other food items may also see price increases in this same period if the bird flu continues to spread or if other supply chain disruptions occur. The rise in egg prices serves as a cautionary tale for all ingredient-dependent businesses about the importance of diversification and adaptation.

Conclusion

The current egg price crisis presents unprecedented challenges for food manufacturers, but forward-thinking companies are discovering that adaptation brings opportunity. With egg prices rising to nearly $6 a dozen, egg farmers and egg producers struggle while the bird flu outbreak continues disrupting the food supply. High egg prices and expanding cage-free egg laws are creating a “new normal” that requires strategic adaptation. Rather than waiting for markets to stabilize, successful manufacturers are proactively reformulating products, diversifying ingredient sources, and building more resilient supply chains that can withstand future volatility.

US Sweeteners has been helping food manufacturers navigate ingredient challenges for over 35 years, specializing in developing cost-effective alternatives to volatile ingredients like eggs. Our technical team can help your company develop customized solutions that maintain product quality while reducing dependency on unstable supply chains. To discuss how we can help your specific application, contact us today.

FAQs

Why are eggs so high in price now?

Eggs are exceptionally expensive due to a perfect storm of factors, with the ongoing bird flu outbreak being the primary driver. This highly contagious virus has forced the culling of approximately 130 million egg-laying hens since February 2022, dramatically reducing the nation’s egg supply and creating unprecedented shortages in the market.

Why is there an egg shortage in the US?

The US is experiencing an egg shortage primarily because of the devastating impact of highly pathogenic avian influenza on egg-laying flocks. When outbreaks occur, entire flocks must be culled to prevent further spread, and it takes months to sanitize facilities and raise new hens to egg-laying age, creating a prolonged supply disruption.

How much do eggs cost in 2025?

As of February 2025, the national average price for a dozen Grade A large eggs reached $5.90, according to Bureau of Labor Statistics data. This represents a 58.8% increase from the same period in 2024 and sets a new historical record, with prices varying significantly by region and specialty eggs commanding even higher prices.

Why are eggs $9?

Eggs are reaching $9 or more per dozen in some regions due to local supply-demand imbalances, regulatory requirements for cage-free production, and distribution challenges. California and other western states with cage free egg requirements face particularly high prices because these operations were disproportionately affected by recent bird flu outbreaks.