The Egg Indicator

A few years ago I read the book "The Candy Bombers." It was about the logistics chain of the Berlin Airlift and how the United States rebuilt war-torn Germany after World War II.  There's an interesting part in the book about how the US needs to stop the black market and skyrocketing costs in Berlin.

A general said (paraphrased), once we see eggs sold outside in the market place then we know we've broken the black market.  For him, it was a basic food item that was a leading indicator that things were getting better. I'd never dream that all those years later I'd be watching an egg chart from US Federal Reserve data!

It all started when inflation took hold in my area. Food prices went through the roof just as my son decided to hit puberty and eat everything in sight. I love him but he would make himself a three-egg breakfast almost every morning and we'd go through a dozen eggs every few days.  

The rampant inflation in our economy raised the price of eggs every few days and before I knew it I was paying over $5 for a dozen eggs!

Luckily, prices have come down but do remain elevated as the chart above shows. This leads me to believe that all the Fed tightening is working, much to the chagrin of over-leveraged AirBnB real estate investors and bad bet-making banks.

Right now the average monthly data is showing a dozen of Grade A eggs at $2.66, which I can corroborate from the supermarket prices I see locally. All good news so far and my models show that egg prices could level off here, maybe go down a bit more before seasonal effects push prices higher.

The Candy Bombers (affiliate link) is a great book and I loved it. If you like books about after-war reconstruction, supply chain, logistics, and a feel-good USA story then grab it from the link I posted above. Thanks.