The incredible, edible egg may be about to add a new descriptive term: Incredibly expensive.
The price of eggs, which have already risen this year because of an outbreak of bird flu, may be set to rise again, thanks to McDonald's (MCD) decision to roll out all-day breakfast next month. Eggs cost an average of $2.57 per dozen in July, a 32 percent jump from a year earlier, according to the Bureau of Labor Statistics.
Even before McDonald's announcement that it would extend breakfast dishes to all hours of the day, restauranteurs were coming up with creative ways to cope with higher prices. Some restaurants are charging more, while others adapted by cutting out eggs from dishes, such as Panda Express, which eliminated eggs in its fried rice. Now, on top of that squeeze comes a fast-food chain that's known for dominating the food-supply chain when it makes an entrance.
Consumers and other restaurants will likely feel the brunt of the pain.
"It's going to make it harder for everyone," Darren Tristano, an executive vice president at research firm Technomic, told Bloomberg News. "It's going to lift prices across a lot of those products that use eggs."
When McDonald's adds a food item, it doesn't do so in a small way. The chain became the biggest buyer and seller of apples when it started selling the fruit more than a decade ago. It's also the world's biggest buyer of beef, pork, potatoes, lettuce and tomatoes.
With the humble Egg McMuffin slated to be on the menu all day long starting on Oct. 6, its demands for eggs will rise, although it's unclear by how much. The full breakfast menu will be tweaked to offer a limited number of items throughout the day, including hotcakes and sausage burritos, and depending on the region, either Egg McMuffins or biscuit sandwiches will be sold, according to The Wall Street Journal.
Breakfast, which now accounts for one-quarter of sales, could end up providing 29 percent of McDonald's U.S. sales. While McDonald's can bargain for lower ingredient prices because of its size, consumers might not see the same restraint in the supermarket.
"The cost will likely be passed through to the consumer," Tristano said.