Bird flu is causing egg prices to increase again due to supply limitations.

The rising cost of eggs has brought the household staple back into the spotlight, with consumers remaining concerned not only about inflation but the absolute level of prices.

For the third consecutive month in a row, egg prices increased annually, marking a reversal from a year of decreases. The cause was the ongoing struggle against highly contagious avian influenza, commonly referred to as HPAI or bird flu.

In July, the cost of a crucial food ingredient increased by 19.1% compared to the same month the previous year, according to CPI data released this week. On the other hand, the entire CPI basket of items only rose by 2.9% during the same time frame.

During the pandemic, egg prices became a concern for consumers due to their widespread use in daily cooking. The rise in egg and grocery prices has been a major issue for consumers who are struggling with higher expenses, leading to a decline in consumer sentiment.

The current inflationary wave seems to be linked to a 7.9% increase from March to April, which can be attributed to seasonal trends in bird flu. This represents the largest month-over-month increase since the spring of 2023.

"Unfortunately, the high-path avian influenza has persisted," said Caitlinn Hubbell, market research analyst at Purdue University's Center for Food Demand Analysis and Sustainability in West Lafayette, Indiana. "The short answer is related to avian influenza."

The bird flu had a historic outbreak in 2022 and surged once again at the end of 2023. Recently, Hubbell stated that resurgences in Colorado and California have negatively impacted supplies.

According to Hubbell, egg demand is "inelastic," meaning consumers will typically purchase the same amount regardless of price increases. However, she pointed out that consumers tend not to stock up when they notice lower costs.

The impact of bird flu outbreaks on grocery store prices can be significant due to the inelastic nature of certain items.

The cost of a dozen large, Grade A eggs has increased to over $3 for the first time in more than a year, according to the Bureau of Labor Statistics.

Although prices have increased, they are still 20% lower than the previous year. However, the price of eggs in the CPI basket has increased by 42% compared to July 2021.

With upcoming seasons less likely to bring bird flu outbreaks, Hubbell believes price movements will hinge on the state of the bird flu.

""The extent of HPAI's impact is difficult to determine," Hubbell stated."