My omelet costs too much, and you'll never guess why.

I have a good friend here in Vegas who has a side-hustle of grocery shopping for people. Kind of like a boutique Instacart for people in her area. Just the other day, we got to talking about the price of eggs — as folk do these days.

My friend reported that she just shopped at Vons and the cheapest prices she could find for a dozen eggs (from Lucerne) was $13.00. This shocked my lovely wife. We had just paid $8.59 a couple days ago at our local Smith’s — already a very high price historically.

Later that day, our friend reported finding a dozen eggs at Whole Foods ( from “365”, their in-house brand) for only $5. I don’t know what that’s all about. Perhaps a loss-leader? Or perhaps their production processes haven’t been affected by what I’m about to describe below?

I don’t know. But the wild price-spreads around town are bizarre. And even $5 for a dozen eggs is quite high. The price of eggs is historically spikey, but eyeballing the chart, between 2016 and 2022, a dozen eggs could be bought, on average, for under $2.

So what gives? This obviously isn’t a symptom of the general price-level increase brought to us by the Federal Reserve’s constant counterfeiting operations. What’s happening?

Well, the easy answer is the recent avian flu epidemic, and that’s definitely a big big factor in the problem. But is our government doing something else to make the problem worse?

You already know the answer. Of course it is. The avian flu is causing poultry producers to kill tens of millions of birds, no question. But there’s no catastrophe that a government program can’t make worse.

Last year, the Department of Agriculture paid poultry producers more than a half a billion dollars to kill birds after the flu strain (H5N1) was detected on their farms.

From the article above:

Officials say the compensation program is aimed at encouraging farms to report outbreaks quickly. That’s because the government pays for birds killed through culling, not those that die from the disease. Early reporting, the agency says, helps to limit the virus’s spread to nearby farms.

Ummm. I see a problem here. It’s sort of an unintended consequences, “Indian cobra” type problem. It’s difficult for me to believe (knowing how humans respond to incentives, as I do) that a policy of paying people to kill birds whether they are sick or not, isn’t going to be abused.

And how hard is it to manufacture the “detection” of H5N1 in a facility if one wanted to? I’m guessing not very hard.

On the margin, this policy must lead to an “over-killing” of birds than would otherwise happen if this government policy wasn’t misaligning incentives.

Again, from the article above:

By compensating commercial farmers for their losses with no strings attached, the federal government is encouraging poultry growers to continue the very practices that heighten the risk of contagion, increasing the need for future culling and compensation.

Of course, it could be argued that this kind of a sledgehammer approach is what’s required to solve this problem, and I’m sure supporters of big government make these claims loudly. I also bet these people never heard of that Indian cobra tale I linked to above.

Based on what I know about how clunky, crony, inefficient, stupid and wasteful most government programs are, I’m going to bet there is a better way to handle bird flu, if only we weren’t mired in all these massive, crony, distorting government regulations and programs.

Any takers?

While I wait, I’m going to go have a very over-priced omelet.

Naturally,

Adam