As egg prices surged to their highest levels toward the end of last year, a curious thing happened: Organic, pasture-raised and other "specialty" eggs were at times less expensive than the conventional dozens.
At some stores in Minnesota and elsewhere, they still are.
"I've seen it, and the dairy managers we talk to are blown away," said Jason Amundsen, co-owner of Locally Laid Egg Co. in Wrenshall, Minn.
The higher cost to produce pasture-raised, cage-free, organic and other types of eggs the industry classifies as specialty has almost always meant higher prices for consumers compared with conventional, or commodity, eggs.
"It's the first time this has happened in this industry, because the price of commodity eggs has never been this high," said John Brunnquell, CEO of Egg Innovations, a leading free-range and pasture-raised egg producer. He was still seeing specialty eggs selling for 50 cents less than conventional at Aldi as recently as two weeks ago.
Even prices that are similar can help drive demand for specialty eggs among consumers who shop primarily by price.
But as commodity egg prices slowly back off record highs and specialty eggs remain relatively stable, that unprecedented inversion is expected to go back to normal — which is why Amundsen isn't raising Locally Laid prices any more than necessary to cover high grain costs.
"I've been in this long enough to know that gas-station eggs are going to drop, and I don't want to be in a situation where I've taken advantage of it and demand drops," Amundsen said. "I wouldn't take any joy in making an extra 10 cents a dozen, because in the end it could be hurting myself."
Locally Laid, which produces about 350 cases of eggs — or more than 4,000 dozen — per week is "easily seeing triple orders," Amundsen said.
"We're grateful for the demand," he said, "but I don't know how to scale up to meet this demand and scale down when demand drops."
For Brunnquell's eggs, including the Helpful Hens brand, prices tend to remain stable throughout the year regardless of swings in supply, demand and the cost to produce eggs due to price-setting agreements.
Organic Valley said Thursday that organic soybean meal and shipping costs mean many organic farmers are also "feeling the pinch."
The nation's largest egg producer, Mississippi-based Cal-Maine Foods, reported that by the end of November its conventional eggs had more than doubled in price while specialty rose only 25%.
That left the average price of a dozen specialty eggs 50 cents cheaper than their commodity counterparts, at least when sold to wholesalers and retailers, who have their own costs to cover when moving and selling eggs. The company also saw the number of specialty cartons sold increase sharply while conventional egg sales fell.
Rhode Island Sen. Jack Reed, a Democrat, recently asked the Federal Trade Commission to investigate "potential price gouging and other deceptive practices" that have caused a carton of eggs to sell for an average of $4.11 per carton in December, more than double what it was the year before.
"Small producers, which have faced many of the same market challenges as the biggest producers, have managed to keep prices under control," Reed wrote.
Reed called out Cal-Maine's record quarterly profit; the company's CEO said at the end of December the company's results "demonstrate the strength of our operating model and ability to execute our growth strategy in a dynamic environment."
Brunnquell said talk of industry collusion is overblown, as the supply of commodity eggs ultimately dictates market prices. The millions of birds killed by avian influenza was enough to upend the market in a lasting way, and flock sizes are still 6% below levels seen a year ago.
"The jarring nature of the situation is that eggs for most people, for most of their lives, have been a very affordable protein," Amundsen said. "But it's cyclical. It's going to be much different 18 to 24 months from now."