By Taryn Phaneuf | NerdWallet
It wouldn’t be Easter without colorful eggs and chocolate bunnies. But threats to the supply of these holiday essentials are pushing prices up at a time when shoppers are worn out by years of high inflation.
Here’s a look at why inflation is having an outsized impact on your Easter basket.
Cocoa prices soar with no relief in sight
Chocolate prices have risen nearly 38% since 2020, the year before inflation started heating up, according to NielsenIQ market research data provided to NerdWallet. Recently, price hikes have stemmed from the soaring cost of chocolate’s key ingredient: cocoa.
A series of bad weather events, as well as disease, have devastated cocoa crops in West Africa, where about 70% of the world’s cocoa is grown. As a result, cocoa prices are at record highs.
So far, there aren’t any signs of cocoa prices turning a corner, says Billy Roberts, food and beverage economist with CoBank, a Colorado-based lender specializing in agriculture. Initial reports on next season’s harvest — which occurs in late summer and early fall — aren’t as optimistic as the industry hoped. Until crop yields improve, cocoa prices will likely stay high.
Roberts says chocolate makers have realized ever-higher chocolate prices aren’t sustainable. While shoppers spent more money on chocolate in each of the past two years, they did so while buying less of it, according to NielsenIQ data.
But that doesn’t mean prices will come down. Instead, Roberts says, packages will shrink. “It’s not necessarily that they’re trying to fool the consumer, but they’re trying to deliver a product at a price point that consumers are comfortable paying.”
Egg prices have increased 47% since August
While chocolate might be an indulgent purchase by grocery shoppers, eggs are a staple. So, even when it isn’t Easter, consumers tend to watch egg prices closely, says Brian Earnest, an animal protein economist with CoBank.
“People know the last dozen eggs, what it cost them, just like they remember the last time they filled up the gas tank,” Earnest says.
Just like with gas prices in recent years, there’s been a lot to watch. The average cost of a dozen Grade A large eggs was $2.02 around Easter 2020, according to data from the U.S. Bureau of Labor Statistics, retrieved from the Federal Reserve Bank of St. Louis’ FRED site, a 38% jump from January of that year. That short-lived spike was brought on by sudden changes in consumer demand because of the COVID-19 pandemic.
By Easter 2021, the average price of a dozen eggs was $1.62. The next year, it jumped to $2.52, and prices continued to skyrocket through 2023.
Eggs have been expensive the past two years primarily because of a highly contagious and deadly avian flu that has wreaked havoc on the U.S. egg supply. The virus is the main reason U.S. consumers saw the average price of a dozen eggs more than doubled between January 2022 and January 2023, when it peaked at $4.82.
Prices descended to an average of $3.27 per dozen around Easter last year and continued that way until the fall. That was partly owed to the fact that egg producers weren’t seeing new cases of bird flu and had an opportunity to rebuild their flocks. But farmers reported a new outbreak in November.
Over the past six months, egg prices have marched upward. In February, the average cost of a dozen eggs was $3 — 47% higher than the August price of $2.04.
Earnest doesn’t expect this outbreak to push prices as high as they were in 2022 and 2023, in part because chicken farmers have made changes to better protect their flocks. But now it’s spring again, and that brings more than the Easter bunny to chicken farms. Migratory birds, which have caused outbreaks of avian flu by spreading the deadly virus to stock animals, are a threat once again as they fly north.
Despite fewer new cases of bird flu in recent weeks, “we’re still in a period of seasonally higher risk to the flocks,” Earnest says.
The article Egg and Chocolate Prices Are Hopping — Just in Time for Easter originally appeared on NerdWallet.