Egg prices are the lowest in a decade

It doesn't matter if you like them hard-boiled, scrambled or soaked in heart-clogging hollandaise sauce: When eggs are this cheap, it's a good time to get cracking.

Supplies in the United States have surged so much in recent months that prices are the lowest for this time of year in at least a decade. It probably will take awhile for consumers to eat through the surplus inventory, so the government is predicting egg costs will drop more than any other food group in 2017.

The slump marks a sharp turnaround in the egg business. In 2015, a bird flu outbreak forced farmers to destroy millions of birds, and prices skyrocketed. Eager to take advantage of the rally, producers expanded flocks that were the biggest ever by the end of last year.

But demand hasn't keep pace. While some farms have scaled back in recent months, hens have gotten more productive, keeping the market flush with supply.

'The market was temporarily starved for eggs, and now it's drowning,” said Tom Elam, president of Carmel, Ind.-based consulting company FarmEcon LLC. 'There's just too many eggs out there.”

Retailers were charging $1.414 on average for a dozen eggs in May, the lowest for the month since 2006, Bureau of Labor Statistics data show. Prices have plummeted 52 percent from a record $2.966 reached in September 2015.

Costs are on track to fall by as much as six percent this year, the U.S. Department of Agriculture forecasts. The decline comes even with overall food inflation projected at as much as two percent.

Total egg supplies in the United States will climb 1.3 percent in 2017, to 8.829 billion dozen, the government said in a June 9 report. That's the highest in data going back to 1992.

Output is projected to rise again next year, with total supplies forecast at 8.957 billion dozen, the USDA estimates. The vast majority of supply is domestically produced.

Farmers nationwide have reduced their flocks by about a million birds a month this year, dropping to 371 million as of June 1, from about 376 million on Jan. 1, USDA data show.

Another bright spot for producers is that demand is expected to pick up before the end of the year. Consumers tend to eat more hot breakfasts that include eggs after the weather turns colder. At the same time, holiday cooking and baking also helps boost consumption, which usually increases around Thanksgiving, according to Elam of FarmEcon.