If you’ve turned on the news or been to the grocery store lately, chances are you’ve seen there’s a nationwide egg shortage, leading to skyrocketing prices for breakfast-lovers everywhere. Though omelets, as a result, may be shrinking your wallet at the same time they’re expanding your waistline, there are ways you can take advantage of this situation — namely by finding a way to invest in eggs. And though financial advisors extolling the virtues of diversification will recommend that you not put all your eggs in one basket, you may want to explore putting some egg investments in your portfolio.
For more help with investing — in eggs or otherwise — consider working with a financial advisor.
Egg Shortage Background
While prices have been going up for the past year across the board — a result of general inflation — egg prices in particular have been going up. General inflation is part of this, but an egg shortage caused by and outbreak of avian flu also plays a big role, as does an increase to the cost of the grains used to feed egg-laying chicken caused by the ongoing war between Russia and Ukraine.
The result of this is an average price of $4.25 for a dozen eggs, more than double the price a year ago.
Commodities Investing Basics
If you want to take advantage of the increased egg prices as an investor, it’s important to first understand commodities investing more generally.
Commodities are natural resources like food, livestock, precious metals and agricultural resources. Essentially, anything that occurs more or less naturally and can be physically bought and sold — as opposed to a stock, bond or other financial instrument.
There are a few ways to invest in commodities. You can buy stocks or bonds from companies that work with the commodity. For instance, if you’re interested in investing in the crude oil market, you buy stocks or bonds from a company that processes the raw material. You could also invest in a mutual fund or exchange-traded fund that in turn invests in these types of companies.
The other major option is to invest in futures contracts for a raw material.
How to Take Advantage of Egg Prices
With eggs prices soaring, you may be wondering how you can apply the above strategies to the market. If you’re looking for a company to invest in, Cal-Maine (CALM) is a good bet. This company, sometimes called “the Amazon of egg producers,” up significantly year-over-year, even as the broader market is down. With other goods, you might expect higher prices to result in significantly reduced sales, but eggs are such a staple that many families will continue to purchase them even as it gets more expensive.
Generally, investing in a company that’s on such an upswing already is not a good strategy — you want to buy a stock when it’s low, before prices soar. That said, it doesn’t seem like egg prices will be going down soon, so while you’ve missed out on some of the growth, there may still be money to be made investing in Cal-Maine and other egg companies.
You could also look for a food-focused ETF or mutual fund.
The Bottom Line
Egg prices are up big time, the result of combined pressures from inflation, avian flu and supply chain snags partially caused by the Russian invasion of Ukraine. While this will hurt you as a consumer, there is a way you can make it help you as an investor — by investing your money in the companies that sell and process eggs, which are generally seeing increases in value.
Investing Tips
- A financial advisor can help you figure out a plan to invest, whether you’re interested in egg prices or not. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- SmartAsset’s free investment calculator will give you a sense of what your investments could be worth down the road. Use it to give yourself a sense of what you could be looking at in terms of value.
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