Serving breakfast is growing more costly for some local restaurants as a surge in egg prices pecks away at profits.
Large Grade A white eggs for store delivery in the Midwest, including Indiana, reached an average price of $2.47 per dozen in June and July, amounting to a 34.5 percent increase from May and a nearly 36 percent jump from July 2014 when a dozen eggs cost $1.82, according to the U.S. Bureau of Labor Statistics.
The increases hit this summer after a virulent form of bird flu wiped out 48 million birds and fowl, including chickens, in the U.S. between December and June. The illness decimated the nation’s egg-laying hens, putting the egg supply in a crunch while demand remains high.
Though the flu subsided during the hot season, migrating birds could spread the disease again this fall, leaving eateries with a grim outlook on egg prices in the near-future.
“I’ve never seen egg prices stay this high for so long,” said Panos Bourounis, owner of the Cosmos restaurants in Fort Wayne. “It’s crazy.”
Known for its large breakfast plates, eggs involve about 70 percent of Cosmos’ business.
The higher prices and other costs have knocked net profits down about 6 percent, Bourounis said.
Egg costs are also taking a toll on the Spyro’s restaurant on West Jefferson Boulevard, which have seen food costs increase by 8 to 10 percent. The brunch businesses have little choice but to ride out the increases.
“Honestly, it’s like a grin-and-bear-it situation,” Spyro’s owner Jean Giatras said. “We’re just going to have to absorb the cost.”
Prices had danced around the $2 mark in the first quarter of 2015, the result of growing egg prices over the past 10 years. But after the latest increase, July’s average price is 108 percent higher than the $1.19 a dozen eggs cost in July 2005.
The current range for large Grade A white eggs is $2.39-$2.48 per dozen, according to a U.S. Agriculture Department market report on Aug. 28.
At $2.48 a dozen, Cosmos, which goes through about 8,000 eggs per week at its Marketplace of Canterbury store, would pay about $1,630 a week to get at least 22 cases of eggs with each case packed with 30 dozen eggs. At the Lima Road store, which Bourounis said uses more eggs each week, the amount is nearly $2,100 to get 28 cases.
“It’s getting to where my food costs skyrocket,” Bourounis said.
Giatras’ two stores go through a little more than 12,000 eggs a week. On top of that, Spyro’s also pays more for products that use eggs as a key ingredient, such as mayonnaise and some salad dressings.
Waynedale Bakery on Lower Huntington Road relies on frozen eggs as an ingredient for cake products, said store manager Chris Miller.
While business is going well, Miller shops around a little more diligently now for egg deals. The bakery also increased prices in June to offset egg costs.
Raising prices at restaurants like Spyro’s and Cosmos isn’t an easy decision. Not only do owners want to avoid driving away customers, but they have to consider whether making the investment to replace their menus is worth the expense.
But egg prices show no sign of decreasing soon.
“You just have to find a happy medium,” Giatras said. “We’ll make it. We always do.”
Poultry farms are taking measures to replace lost flocks and limit the animals’ exposure to avian influenza, but the disease could spread again as birds migrate in the autumn.
Because of the supply situation, the USDA expects egg prices to remain at record highs through mid-2016. Wholesale prices for a dozen large Grade A eggs in the New York market could range $2.38-$2.54 in the fourth quarter, the agency’s livestock, dairy and poultry outlook for Aug. 18 shows.