Las Vegas businesses trying not crack in face of rising egg prices

As record-high U.S. egg prices caused by a recent avian flu outbreak have swept the nation, Las Vegas Valley businesses are trying not to, well, crack as price increases affect commercial bakeries, retail customers and restaurants.

Employees at some of Las Vegas’ largest commercial bakeries estimate the price of liquid eggs, an egg-white product used in many confectionery products, has tripled or even quadrupled over the past two months.

And it’s placing an unforeseen strain on business.

“When the price of an item goes up like that, it absolutely adds to an increase in cost in the long run,” said Andrea Briones, manager at Great Buns, a central valley bakery whose clients include Caesars Entertainment, MGM Resorts and Station Casinos as well as chain restaurants like Capriotti’s, Jason’s Deli and IHOP.

Since December, more than 48 million chickens, turkeys and other egg-laying fowl have been linked to the H5N2 avian flu — a highly pathogenic disease that spreads easily among flocks, according to the U.S. Department of Agriculture.

The majority of those birds, around 34 million, were chickens, said USDA agricultural economist Alex Melton, costing the U.S. more than 10 percent of its egg-laying hen population.

The worst of the disease happened in May, Melton said, and is likely over. But the depletion of more than 10 percent of the United States’ 300 million egg-laying hens has tightened egg supply, causing buyers to pay up.

“There has been an explosion in the price of eggs,” Melton said. “But there’s a seasonality to most viruses that when you hit the summer, they’re not as widespread.”

For Great Buns, a standard size, 30-pound container of liquid egg has risen from just $24 two months ago to $88 to $90, Briones said.

Ditto for Pastry Palace, another Las Vegas commercial bakery, manager Jessica Overton said.

“The price has at least doubled in the past month,” Overton said, “probably more.”

COSTS ARE BEING ABSORBED — FOR NOW

Although popular national suppliers such as Dawn Foods, U.S. Foods and BakeMark are charging valley bakeries more for both liquid and traditional egg cartons, local bakeries aren’t passing on the cost to their customers — yet.

“We’re trying our best to keep everything the same, just so customers don’t have to deal with that increase,” Overton said. “But just about everything we bake includes eggs.”

Briones added, “We haven’t raised our prices, but we’re definitely looking at that being an option.”

Retail customers are seeing price increases, too.

At Albertson’s, the price of a dozen store brand eggs was $2.69 on a recent weekend compared with $1.49 just weeks ago.

Tom Bracken, who manages the Albertson’s at 1001 S. Rainbow Blvd. in Las Vegas, said the store might soon consider limiting quantity when eggs are on sale.

Above all, Bracken said the store needs to make sure it has enough supply for the WIC program — a USDA-funded assistance program for low-income mothers and children.

“There’s rumor we may have to start holding customers to the set quantity on a coupon item,” Bracken explained. “Just so we have enough for the WIC program.”

Although Albertson’s prices for baked items haven’t increased, Bracken said anything is possible if egg costs continue to rise.

“So far, we’ve just noticed eggs,” Bracken said. “But we heard turkey could be next, then chicken.”

Melton couldn’t confirm changes in chicken and turkey prices. But as depleted flocks of egg-laying chickens are repopulated, egg prices will remain high through at least the end of 2015, he said.

Newborn chickens take about six months to begin laying eggs, Melton said.

“There will be a lingering effect for at least a few months,” Melton said. “It just takes time to repopulate the egg-laying flock.”

WEATHERING THE STORM

In the meantime, both chain and local restaurants said they also are holding off on price increases as long as possible, in hopes of weathering the storm.

For Capriotti’s, contracts with egg-based products like mayonnaise, and popular menu items such as turkey and chicken, are signed long term to prevent such rapid changes in market price, said president and CEO Patrick Walls.

Since most of Capriotti’s’ long-term deals don’t expire until 2016, the company doesn’t plan on charging consumers for increases in local bread prices, Walls said. Only if market prices keep rising into the new year, Walls said, will Capriotti’s consider charging Las Vegans more.

“If we see a lot more with avian flu, we could eventually see some increases,” Walls said. “But so far, so good.”

Kevin Mills, owner of the three Omelet House restaurants in the valley, said he’s facing the highest egg prices he has seen since founding the restaurant in 1978. Increases since mid-May are costing his three valley restaurants $2,700 per week in eggs, said Mills, whose menu items include eggs any style, chicken-fried steak and eggs and huevos rancheros.

But the owner refuses to budge.

“We’re holding the line on this,” Mills said. “When you’re local, you have to be loyal to your customers. Because they’re local to you.”

Contact Chris Kudialis at ckudialis@reviewjournal.com or 702-383-0283. Find him on Twitter: @kudialisrj.