"Avian flu continues to spread, especially in flocks of egg-laying hens," economist Lee Schulz, an associate professor at Iowa State University wrote in a blog post. "When the flu hits, some birds die and others must be euthanized. That reduces the supply of eggs, a commodity for which there are few substitutes," he explained.
"The immediate result: The wholesale price of processed "breaker" eggs nearly tripled in May, while prices of wholesale eggs sold at the grocery store have jumped 85% to $2.20 a dozen in the Midwest," Schultz noted. "The impact will ease over time as the industry breeds more chickens," he added.
Schulz was also quoted in the May 13 Sacramento Bee story, "Little inflation relief in sight for California shoppers as meat, other food costs rise."
Food prices, like that of any product, are largely driven by supply and demand. Supplies for some products are somewhat less than needed at the moment while demand is strong — a recipe for higher prices, Lee Schulz, associate professor of economics at Iowa State University, told The Bee.