Starting the day with breakfast is becoming a pricey luxury – NBC 6 South Florida

Consumers are shifting their morning routines, recent data shows. This comes as prices for eggs and coffee, two staples of breakfast in the U.S., remain at record highs.

• Consumers are shifting their morning routines, recent data shows.
• This comes as prices for eggs and coffee, two staples of breakfast in the U.S., remain at record highs.
• The price of eggs in the U.S. is up 53% year over year, according to the latest Bureau of Labor Statistics data.

Alicia Love typically purchases the most popular beans for Coffee Labs Roasters in a one-year deal with her coffee importer. But at the end of last year, prices were so high that she decided to wait the market out.

Instead, prices climbed even higher. With supplies running low, she signed a purchase order for a three-month supply, and hopes that prices will soon ease.

“At the time I thought, should we wait to sign this new deal?” Love, an owner of the Tarrytown, New York, business, told CNBC. “I’m kicking myself in the butt now for not doing it then.”

The initial deal would have cost Love roughly $4 per bag, which is for either 130 pounds or 152 pounds, depending on the variety. The three-month deal she just signed was for roughly $5 per bag.

The skyrocketing cost of coffee comes as egg prices are also rising without any end in sight. Both products are pillars of an American breakfast, which has long been one of the cheaper meals to eat either at home or on the go. The quickly escalating prices means consumers are changing their habits and businesses are scurrying to react.

A rapid rise

In the latest consumer price index report, Bureau of Labor Statistics data showed the price of eggs in the U.S. up 53% year over year. But the pace of gains has been rapid. From December to January, the average cost of a dozen spiked 15%, per FRED data. In the week ended March 3, a 7% week-over-week increase brought average prices above $8 a dozen, JPMorgan Chase said.

While egg production is suffering from a devastating avian flu outbreak, which has resulted in the culling of millions of hens. Some say the consolidation of the industry is exacerbating the problem. On Friday, the Wall Street Journal reported that the U.S. Department of Justice opened an investigation into antitrust practices that might be at play.

Coffee, meanwhile, is also reaching record-high prices. A dry spell in Brazil, which has hit crop yields, is largely at fault. Over the past 12 months, futures prices have more than doubled. Last month, coffee prices on the Intercontinental Exchange surpassed $4 per pound for the first time ever.

“I’m hoping that we just have stability in the market. It’s very challenging to navigate the volatility, and the consumers are going to struggle with that,” said Andrew Blyth, coffee trading operations manager at Royal New York. “You can’t have menu prices changing once a month, especially for something as … routine as coffee.”

Consumers have gotten the message. Morgan Stanley said in a Wednesday note that its survey of consumer sentiment signaled the first negative reading since June 2024. This follows the University of Michigan’s own survey from February that showed consumers expect inflation to get worse in the near term.

Profits under pressure

The impact is being felt across the restaurant industry. Dine Brands, the parent of breakfast staple IHOP, has seen its stock pull back more than 13% this year and shares hit a 52-week low on Wednesday after providing a disappointing 2025 outlook. The majority of analysts polled by FactSet maintain a hold rating.

“For IHOP … we’re expecting sort of low to mid single-digit inflation cost for the year. And that’s really primarily – it’s really driven by eggs,” Dine Brands Chief Financial Officer Vance Chang said on the company’s earnings call. “Outside of that, I think there’s some headwinds with bacon and coffee as well.”

Facing similar pressures, Waffle House and Denny’s recently imposed a surcharge for menu items containing eggs as opposed to a straight up price hike. Byrne said such a move may be more bearable for consumers because it’s assumed the surcharge is a temporary increase. McDonald’s has held the line and said the company will not implement an egg surcharge.

“My sense is that consumers may appreciate that it is noted as a temporary surcharge rather than a blanket price increase, as this implies that prices will return when the situation changes,” Byrne said. “On the flip side, printing menus is expensive and an operator may not be in a position to do so quickly.”

The impact of tariffs

More bad news could be coming for coffee drinkers. Coffee Labs’ Love said some decaffeinated coffee travels back and forth over the U.S. border and could be impacted by proposed tariffs.

She explained that if a roaster is using a washing method to decaffeinate their coffee, the mountain water used in the process comes from Mexico, but pre-roasted beans can be sent to Canada for processing. This means President Donald Trump’s tariffs on Mexico and Canada could add a new layer of price pressures.

“This cost will show across the board,” Love said. “The Canada tariff will make decaf coffee cost a lot more on top of the already high price.”

Blyth is less sure that decaf coffee will be hurt by the White House’s trade policy, but signaled there is still a lack of clarity.

“As of now we don’t believe it would incur a tariff, but we just don’t know yet. Hopefully there is more guidance in the coming days to help navigate the unknowns,” Blyth said.

Conclusion

The rising cost of eggs and coffee is changing the way consumers approach breakfast, with many opting for simpler, more affordable options or skipping the meal altogether. As the prices continue to rise, businesses are being forced to adapt, from imposing surcharges to altering their menus. The impact is being felt across the restaurant industry, with many companies struggling to maintain profitability in the face of rising costs.

Frequently Asked Questions

Q: Why are eggs so expensive?

A: The price of eggs in the U.S. is up 53% year over year, due to a devastating avian flu outbreak and consolidation in the industry.

Q: Why are coffee prices rising?

A: A dry spell in Brazil has hit crop yields, leading to a sharp increase in coffee prices. Futures prices have more than doubled over the past 12 months.

Q: How will the tariffs affect coffee prices?

A: Proposed tariffs on Mexico and Canada could add a new layer of price pressures for decaffeinated coffee, which travels back and forth over the U.S. border.

Q: What is the impact on the restaurant industry?

A: The rising cost of eggs and coffee is putting pressure on restaurant profits, with many companies being forced to adapt by imposing surcharges or altering their menus.