For the past 130 years, Ferrara Bakery, owned by Ernest Lepore’s family for four generations, has been renowned for its delectable pastries such as cream puffs, cannoli, and sfogliatelle in Manhattan’s Little Italy. Despite enduring wars, economic challenges, and neighborhood transformations, the bakery’s traditional recipes have remained a staple in the community. However, the rising cost of eggs, a vital ingredient in nearly half of their products, is posing a significant challenge for Ferrara Bakery.
Ernest Lepore, the president of Ferrara Bakery, expressed concern about the escalating prices of eggs, stating that the bakery cannot continue to absorb these costs without raising prices for customers. With egg prices at historic highs, small businesses like Ferrara Bakery are feeling the strain. Wholesale buyers are now paying over $8 for a dozen eggs, while the national average wholesale price has slightly decreased to $6.85 per dozen.
Grocery stores, willing to sell eggs at a loss to attract customers, have managed to keep retail prices just under $5 per dozen. However, the Bureau of Labor Statistics reported that the average price of a dozen eggs in grocery stores reached a record high of $4.95 in January 2025. The USDA predicts a potential 40% price increase this year, with experts warning that elevated prices may persist even as egg supplies recover.
The impact of the exorbitant egg costs is particularly severe for small businesses like Square Diner in Tribeca, owned by Theodore Karounos. Karounos anticipates an additional annual cost of tens of thousands of dollars due to the surge in egg prices, which could jeopardize the financial viability of his establishment.
The surge in egg prices can be attributed to a nationwide supply shock caused by a devastating outbreak of avian flu, affecting over 166 million commercial poultry birds since 2022. Recent months have seen a significant increase in losses, with 52 million layers and pullets succumbing to the flu. The outbreak has led to a substantial reduction in the nation’s supply of egg-laying hens, reaching a nearly ten-year low.
The challenges faced by small businesses tied to wholesale egg prices underscore the severity of the situation. As the poultry industry struggles to recover from the impact of the avian flu, businesses like Ferrara Bakery and Square Diner are grappling with the prospect of higher costs and the difficult decision of whether to pass them on to consumers.
As the United States experiences a shortage of eggs, the demand for this commodity remains steady, leading to a potential increase in egg prices. This situation poses challenges for small businesses that heavily rely on eggs, such as Ferrara Bakery and Square Diner. Unlike larger restaurant chains like Denny’s and Waffle House, which have adjusted to the rising costs by adding an egg surcharge to their menu items, smaller businesses are finding it harder to do the same, according to Bruce Sacerdote, an economics professor at Dartmouth College.
Sacerdote explained that smaller establishments, like restaurants, may struggle to pass on the full price increase to their customers due to various market factors. This means that these businesses might have to absorb some of the cost themselves, impacting their profit margins. For instance, at Tom’s Restaurant in New York City, co-owner John Ieromonahos is grappling with an additional $2,000 weekly expense to keep up with the egg prices, without wanting to burden customers with extra charges.
Similarly, at The Hungarian Pastry Shop, owner Philip Binioris is trying to avoid passing on the higher egg costs to consumers but acknowledges the difficulty of maintaining stable prices amid the escalating expenses. Meanwhile, Cal-Maine Foods, the nation’s largest egg producer and distributor, has reported significant profit increases during the bird flu outbreak, showcasing a stark contrast to the struggles faced by smaller businesses.
As consumers, small businesses, and their customers navigate the challenges of rising egg prices due to the avian flu outbreak, there is concern that grocery shoppers may continue to face higher prices even after the egg supply stabilizes. Grocery stores might seek to recover lost earnings by maintaining elevated prices, as witnessed during the initial surge in egg prices at the start of the current avian flu crisis.
In the heart of Little Italy, Lepore is on a mission to explore alternative cost-saving measures in order to avoid raising prices. By recently upgrading the cooling system and enhancing the refrigeration units in his building, he has effectively reduced electricity expenses over the long haul. Drawing inspiration from his resourceful grandparents who sustained their business during the Great Depression, Lepore has adopted a strategy of producing smaller batches of goods to maintain freshness and minimize waste.”Eggs dictate our production,” he remarked. “With Easter approaching, I aim to bake last-minute to prevent any egg wastage.” The article “Small Businesses Struggling with Price Increases: The Impact of Rising Egg Costs” was originally published on abcnews.go.com.
