Part 1. Eggs Are Getting Egg-Spensive! Cracking The Price Hike And Why It Matters

Interestingly, American economist, Paul Solman said that there seems to be an increase in the number of broiler chicken and chicks sales (PBS News, 2023). This distinct customer behavior is assumed due to buyers wanting to raise and produce eggs by themselves. The same behavior cannot be found in Indonesia though.

Worldwide, Rabobank's global egg price monitor reached an all-time high in Q1 2023, with prices more than 2.5 times higher than in 2007 and a 100% increase from the previous year (Figure 10). Notably, the US and EU experienced price increases of 155% and 62% between Q1 2022 and Q1 2023, while Japan saw the highest prices since 2003 at JPY 235 in March. Historic highs were also observed in various other markets, including Thailand, the Philippines, Israel, New Zealand, Nigeria, Kenya, Brazil, Mexico, and Argentina. These steep price hikes have significant implications for everyone in the egg supply chain, from breeders and producers to retail, foodservice, and food processing customers.

Historically, egg prices have generally followed the FAO Food Price Index, with occasional divergences, like the period from 2007 to 2013 when high and volatile feed prices posed challenges for the industry. In the subsequent years, from 2013 to 2019, egg prices outpaced the index due to robust demand and normalized feed costs (Mulder, 2023).

Figure 10. Global Egg Price (Mulder, 2023)

5. Conclusion 

Our research has found that the prices for eggs have nationally inflated. The change of egg price itself is directly correlated to the rise in national CPI. However, it cannot yet be said if the rise in egg price can be linked with rising inflation unless egg-related items. Eggs contributed sizably in the overall F&B price basket and the F&B price basket greatly influences the national CPI. However, the national CPI themselves has little correlation with inflation, as proven with the correlation analysis (Figure 8). Thus, other items affect eggs more than eggs affect other items. Therefore, there is greater work at play to the contribution of egg inflation than the national CPI. This content will be Eggsplored in the part 2 of this article.

Bibliography

Badan Pusat Statistik. (2020). Bps.go.id. https://www.bps.go.id/subject/3/inflasi.html

OECD (2023), Inflation (CPI) (indicator). doi: 10.1787/eee82e6e-en (Accessed on 17 October 2023)

Irena, A., & Ceyda, O. (2012). Back to Basics: What Is Money? - Finance & Development, 

September 2012. Imf.org. https://www.imf.org/external/pubs/ft/fandd/2012/09/basics.htm