Egg prices have nearly tripled ahead of the Easter holiday, when U.S. demand typically spikes. This year, it’s not a travelling bunny that is driving demand, it’s Americans staying in their houses as they combat the spread of COVID-19.
The U.S. supply chain is optimized to deliver bulk-packaged eggs to restaurants or processed eggs, which account for nearly 30% of the total supply. Demand for these eggs has collapsed amidst restaurant closures. Meanwhile, as more Americans are at home, they are cooking full breakfasts and baking more, increasing demand for twelve-packs of eggs at the store.
As a result, the available supply at groceries is restricted due to logistics and rising consumer demand, rather than actual egg shortages. This pushed average grocery store costs up from 94 cents per dozen to over $3.00 last week, according to the U.S. Department of Agriculture.
Across the food supply chain, other items are feeling the stress of restaurant closures, leading to excesses of items like chicken wings, butter, and American cheese, all of which are consumed at higher rates away from home than by grocery store shoppers.
**Oil Truce Disappoints Markets
On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) and Russia met and made a momentous agreement to slash oil production by over 20%.
This will end a monthlong feud between Saudi Arabia and Russia where two of the world’s biggest petroleum producers raced to outproduce one another. The two giants have now agreed to drop their production to 8.5 million barrels per day.
The oil market leapt last week on expectation of this deal, but as negotiations dragged on and the proposed production cuts got smaller, prices faded. Rumors flew Thursday morning that cuts could be as high as 20 million barrels, but when the ultimate deal was revealed to be less than half of that, prices tumbled. By the close of the week, prices were near the low, trading near $23 per barrel.
**Precious Metals Explode
All week, investors clamored to buy gold and silver, chasing gold to levels not seen in ten years. Many economists believe our government’s trillions of dollars of stimulus could ignite inflation, cause the value of the U.S. dollar to drop, and precious metals to skyrocket as they have when foreign countries or other administrations borrowed aggressively and increased money supplies.
Gold finished the week at $1740 per ounce, and silver settled just shy of $16 per ounce.