NCEA Level 2 · Year 12 · Economics · 3 minutes
Why eggs got so expensive: supply and demand
Fewer hens, inelastic demand, and a supply curve that shifted left.
Key terms
- Equilibrium
- The price and quantity where the quantity demanded equals the quantity supplied.
- Supply curve
- A line showing how many eggs farmers will sell at each price.
- Demand curve
- A line showing how many eggs people are willing and able to buy at each price.
- Shortage
- When people want to buy more than farmers can sell at the current price.
- Price inelastic demand
- Demand that stays strong when price rises, so a fall in supply causes a bigger price rise.
Transcript
In May twenty twenty two, a dozen eggs in New Zealand cost about four dollars and eighty six cents. A year later: eight dollars and fifty eight cents. That's up more than seventy five percent. So who scrambled the egg market?
On the first of January twenty twenty three, battery cages for hens were finally banned. New barns cost a lot, and supermarkets were dropping caged eggs too, so some farmers switched systems and some quit. The flock shrank by more than half a million hens, and shelves went bare.
Economists explain this with supply and demand. The demand curve shows how many eggs people are willing and able to buy at each price. The supply curve shows how many eggs farmers will sell at each price. Where they cross is the equilibrium: quantity demanded equals quantity supplied.
Now, fewer laying hens means fewer eggs at every price, so the supply curve shifts left. At the old price, people want more eggs than farmers can sell: a shortage. Buyers compete, the price rises, and the market settles at a new equilibrium: higher price, lower quantity.
Notice what didn't move: the demand curve. The higher price caused a movement along it: a contraction in quantity demanded.
So why did the price jump so much? One big reason: demand for eggs is price inelastic. They're a staple with few close substitutes, so people keep buying. And with inelastic demand, the same leftward shift in supply causes a much bigger price rise.
High prices did their job, too: they gave farmers an incentive to rebuild their flocks. By late twenty twenty three there were about three point eight million laying hens, and prices eased. But feed costs had climbed too, so eggs still cost far more than before the ban.
Three things for your exam. One: a fall in supply shifts the supply curve left. Two: at the old price there's a shortage, so the price rises to a new equilibrium with a lower quantity. Three: for the same fall in supply, the more inelastic the demand, the bigger the price rise. So who scrambled the egg market? Fewer hens, and shoppers who couldn't say no.
Sources
Every fact in the video, and where it comes from.
- 1rnz.co.nz/news/national/492153/here-s-why-egg-prices-are…
- Stats NZ: the average price of a dozen eggs (weighted average, cheapest available brand) rose from $4.86 in May 2022 to $8.58 in May 2023, up 76.5 percent; fresh eggs were a major driver of a 12.1 percent annual rise in food prices.
- Grain costs were up at least 60 percent in the year to mid-2023; feed is 65 to 70 percent of the cost of producing an egg.
- 2figure.nz/chart/WNZOpEoBKRyz4hBh-a5aHFhuTKVojTjod
- Stats NZ: the average price of a dozen eggs (weighted average, cheapest available brand) rose from $4.86 in May 2022 to $8.58 in May 2023, up 76.5 percent; fresh eggs were a major driver of a 12.1 percent annual rise in food prices.
- Stats NZ dozen egg price peaked at $9.50 in July 2023; stayed around $8.30–$9.50 through 2024; reached $10.14 in September 2025 (up 14.4% annually); about $8.80–$9.00 in the first half of 2026.
- 3consumer.org.nz/articles/how-did-egg-prices-double-in-a-year
- The phase-out of battery cages began with the 2012 layer hens code of welfare (over 80% of eggs then laid in battery cages); battery cages were banned completely from 1 January 2023 (ban came into effect at the end of December 2022).
- 4rnz.co.nz/news/business/481515/egg-shortage-supermarket-…
- The phase-out of battery cages began with the 2012 layer hens code of welfare (over 80% of eggs then laid in battery cages); battery cages were banned completely from 1 January 2023 (ban came into effect at the end of December 2022).
- Egg Producers Federation (Michael Brooks, Dec 2022): the ban led to a drop of about 600,000 or 700,000 hens in the commercial flock; more than 75% of farmers had to change their farming methods or their career; supermarket pledges to stop selling colony-cage eggs (Foodstuffs 2027, Countdown 2025) led some farmers to leave.
- Supermarket shelves were bare of eggs in late December 2022 / early 2023.
- 5rnz.co.nz/news/country/503013/egg-supply-just-about-ther…
- Layer hen population grew from 3.4 million in February 2023 to 3.8 million by November 2023; egg prices fell for the third month in a row after peaking in July 2023.
- 6scoop.co.nz/stories/BU2510/S00281.htm
- Stats NZ dozen egg price peaked at $9.50 in July 2023; stayed around $8.30–$9.50 through 2024; reached $10.14 in September 2025 (up 14.4% annually); about $8.80–$9.00 in the first half of 2026.
- 7ageconsearch.umn.edu/record/277809
- Demand for eggs is price inelastic (USDA ERS estimate of own-price elasticity about -0.14; eggs more price inelastic than meat or poultry).
- 8britannica.com/money/supply-and-demand
- A decrease in supply shifts the supply curve left; at the original price there is excess demand (a shortage), so price rises to a new equilibrium with a higher price and lower quantity; the price rise causes a movement along (contraction of) the demand curve, not a shift in demand; the more inelastic demand, the larger the price change for a given supply shift.
Image and sound credits
- Egg carton ("It's 12 of One, 2 Half Dozen of The Other"): cogdogblog, CC0, via Wikimedia Commons
- Making an Omelet: Caroline Attwood, CC0 (Unsplash), via Wikimedia Commons
- Omelette: Renee Comet, public domain, via Wikimedia Commons
- Hen, poultry industry (caged laying hens): rawpixel, CC0
- Feeding the poultry: a farm scene at Matatoke, Thames, 1920 (Auckland Weekly News): Auckland Libraries Heritage Collections, no known copyright restrictions
- Hens engraving, Brett's Colonists' Guide (1883): public domain, via Wikimedia Commons
- Empty shelves: citytransportinfo, CC0; Empty Shelves Moscow 2022: Adzhanoev, CC0, via Wikimedia Commons
- Chicks hatching: Reuvenk, public domain, via Wikimedia Commons
- Egg price data: Stats NZ Food Price Index (selected monthly weighted average prices), via Figure.NZ, CC BY 4.0
- Supply and demand graphs, flock and price charts drawn in code
- Paper textures: ambientCG (CC0)
- Sound effects: Freesound contributors (CC0)
- Music: generated with ACE-Step · Voice: Gemini TTS
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