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Comment by gtk40 | Hacker News Reader

I'm curious how Costco is weathering the storm better than others. Typically Aldi is the cheapest place for me to buy eggs, but they're almost $5 a dozen for basic eggs. I've seen even more at other grocery stores (Publix was several dollars more a dozen). The cage free eggs were $7/2 dozen ($3.50/dozen) earlier this week at Costco.

I'm in the Southeastern US in a suburb of a major city.

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I usually go to the Mountain View Costco. From the /r/bayarea subreddit they've only been out of eggs a few busy days since the Covid-19 pandemic started, but prices have risen from under $3 for 2 dozen to $5.99 for 2 dozen over the same time period.

I didn't realize us Canadians had it so good: agriculture oligopolies have kept our prices so much higher than the US that when we get similar absolute jumps the percentage increase doesn't look so bad. I don't think I've seen 6 bucks for 24 eggs in a decade. Same story for just about every basic.

It’s probably a simple matter of bulk paid-up-front purchasing, similar to how Apple and Toyota were the front of the line for chips.

Let’s pretend Costco needs 100 eggs.

Normally 500 eggs are produced, but this year only 300 were produced.

Costco has a guaranteed contract and receives their 100 eggs. Everyone else who hasn’t paid yet fights over the remaining eggs and prices rise.

Southwest Airlines was also known for fuel agreements that hedged against sudden price increases.

Most people do this, this isn't unique to Costco or Southwest Airlines. That's why future contracts exist. Although it rarely guarantees a delivery, it does allow you to hedge against increases/decreases as a company.

You can take a look at APU0000708111 and see how crazy it's been the past 2-3 months.

In Colorado (where the bird flu is hitting us hard) Costco rarely has the two dozen cartons in stock.

I think Costco locally sources their egg suppliers in some capacity which would explain these regional differences.

Much of the rise seems to be caused by avian flu resulting in the deaths of about 10% of chickens in the US. That would not be a uniform 10% at every farm.

Some farms will have lost a lot more and some will have lost less or none.

I think that most retailers have contracts with a specific set of farms to supply those eggs, which will only be a small subset of all egg farms.

It could simply be that the farms Costco has contracts with happen to mostly be ones that haven't been hit hard with avian flu.

At least a their business center it went from $45 for 15 dozen to $110 in a matter of a few months.

Yea, I noticed this same thing a couple weeks ago in a relatively small Michigan college town. Used to buy eggs at Aldis for 65 cents not that long ago.

I got 5 dozen for about $3.10/doz on Monday in MN at Costco. Aldi has been around $3.75/doz for a while, and recently jumped to $5/doz.

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