The Impact of Egg Prices on Small Businesses Amid Avian Flu

Over the past 130 years, Ferrara Bakery in Manhattan’s Little Italy has been a beloved staple, renowned for its pastries like cream puffs and cannoli. But the bakery, operated by the Lepore family across four generations, is currently facing a significant challenge: the soaring cost of eggs, which have become a critical ingredient in many of their products.

The Egg Price Escalation

In recent months, egg prices have surged dramatically, reaching unprecedented highs. At the wholesale level, many businesses were paying upwards of $8 per dozen as of last week. However, a recent USDA report indicates a slight drop in prices, now averaging $6.85 per dozen, yet this remains harsh for small businesses that rely on wholesale rates.

“We can’t keep passing on costs to our guests,” stated Ernest Lepore, president of Ferrara’s Bakery, in an interview with ABC News. He emphasized the burden of rising prices as Easter approaches, making it difficult to maintain customer loyalty while balancing operational costs.

Challenges for Small Businesses

Grocery chains often sell eggs at a loss to attract customers, resulting in a retail average of around $5 per dozen. The Bureau of Labor Statistics notes a record high of $4.95 per dozen in January 2025. Predictions from the USDA suggest prices could rise another 40% this year. Despite this, smaller entities like Ferrara Bakery do not have the same flexibility to absorb or pass on costs, as they are tied to fluctuating wholesale prices.

Consequences for New York’s Restaurants

The impact extends beyond bakeries. Theodore Karounos, owner of the Square Diner in Tribeca, revealed that he expects to incur an additional $70,000 this year for egg purchases alone. “If things hold up at this price and we remain as busy as last year, I cannot just absorb that hit,” he explained.

Similarly, John Ieromonahos, co-owner of Tom’s Restaurant on the Upper West Side—famous for its appearance in “Seinfeld”—has reported an extra weekly expense of approximately $2,000 for eggs, which are crucial for their breakfast offerings. He expressed concern that sustaining these prices might force them to increase menu costs.

Avian Flu’s Role in Rising Costs

The primary driver behind these escalating costs is a severe outbreak of avian flu affecting poultry throughout the U.S. The Centers for Disease Control reports that since the outbreak commenced in 2022, over 166 million commercial poultry birds have been impacted, with 52 million layers lost in just four months recently, marking an unprecedented situation in the issue of egg supply.

Karyn Rispoli, managing editor at Expana, pointed out that the egg-laying hen population is at a near ten-year low. This has created a market imbalance where demand remains steady against a backdrop of shrinking supply, leading to inflated prices.

Adapting to Economic Pressures

Business owners like Philip Binioris of The Hungarian Pastry Shop are grappling with similar dilemmas. He wants to keep prices fair but feels the pressure of soaring costs. “It’s frustrating. I’m just kind of waiting to see how bad this gets before I make a decision on how I’m going to change prices,” Binioris commented.

While larger chains can implement surcharges, small businesses face unique constraints and often must absorb costs to maintain customer goodwill. Bruce Sacerdote, an economics professor at Dartmouth College, noted that the margin for smaller establishments is tighter, necessitating sacrifices without immediate price adjustments.

The Dilemma of Sustainable Business Practices

At Ferrara Bakery, Ernest Lepore is exploring various measures, including energy-efficient upgrades and minimizing production waste. He is determined to optimize batch sizes to ensure every egg is used effectively, especially as they prepare for the busy Easter season, stating, “Eggs are determining production.” Furthermore, he reflects on his grandparents’ resourcefulness during tough economic times as he navigates this challenge.

Conclusion

As egg prices remain high due to ongoing supply chain issues and avian flu, small businesses in New York’s dining scene are at a crossroads. The dedication to providing quality products without burdening customers ensures these long-standing establishments continue to adapt, though challenges persist in this unpredictable economic climate.