All those nighttime Egg McMuffins could mean higher egg prices at the grocery store, some market researchers say.
Beginning Oct. 6, McDonald’s restaurants across the country — more than 14,000 of them — will begin serving all-day breakfast, a long-awaited move that’s created buzz for the struggling fast-food giant. It’s also leading to worries about the nation’s egg supply, which is already constrained by the devastating avian influenza outbreak earlier this year.
The increased demand for eggs from the Golden Arches likely will mean egg prices continue to rise, some experts say. Beyond all-day breakfast, there’s the possibility of ordering an egg atop one’s Quarter Pounder now, an option that didn’t exist before.
“This will put further stress on it, and ultimately we’re going to see higher (prices) that will be passed on to the consumer,” said Darren Tristano, executive vice president of Technomic.
The average U.S. retail egg price continued to sit at a record $2.57 a dozen in July, according to the most recent Bureau of Labor Statistics data available.
There likely will be additional price increases at both grocery stores and restaurants serving eggs, though some restaurants may be large enough to swallow the increased costs, Tristano said. In the short term at least, egg and potato farmers likely will be happy, though it remains to be seen how much it will benefit McDonald’s sales in the long run, Tristano said.
“In the short term, it will help (McDonald’s) offset the decline, maybe get close to flattening out,” Tristano said.
In an interview earlier this week, McDonald’s U.S. President Mike Andres acknowledged the immense boost in needed breakfast materials but expressed confidence in meeting consumer demand. “We have the best supply chain in the world,” Andres said.
McDonald’s spokeswoman Heidi Barker Sa Shekhem echoed that Thursday: “We’ve modeled for these scenarios and we’re confident in our ability to supply for McDonald’s customers.”
Barker Sa Shekhem declined to comment on whether the increased demand would drive up egg prices.
In six months through mid-June, avian influenza killed more than 48 million fowl, according to U.S. Department of Agriculture data. Iowa, the country’s largest egg producer, lost almost 32 million birds, most of them egg-laying chickens.
John Brunnquell, CEO of Egg Innovations, an Indiana-based free-range egg company, said McDonald’s all-day breakfast was good news for egg farmers. “As far as direct impact, we don’t expect to see much, but it’s a rising tide lifts all boats,” he said. “Anytime we see an expansion of the egg market, we see that as a very good thing.”
Brunnquell said egg prices could continue to rise as the supply rises to meet demand. “We’re in a very high (priced) market right now,” he said. “In the very least, (all-day breakfast) will support that.”
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