Twin Cities (home of carb monger General Mills) paper gives first nod to popularity of Atkins:

TShell shock: Egg prices break record levels
Jim Buchta, Star Tribune Staff Writer

Published December 13, 2003 PROT13


In the eyes (and waistbands) of many low-carbohydrate diet devotees, even a 100 percent increase in the cost of eggs --which cost less than half a pack of cigarettes -- is a small price to pay for all that protein.

But if you're like Jim Jurmu and you're in the midst of your holiday baking, egg prices are something to watch. This month alone, Jurmu will go through 5,973 dozen eggs, and he's paying double what he did last year. "It's a bad deal," said Jurmu, co-owner of Wuollet's Bakery in Minneapolis and St. Paul. "This is the most profitable time of year for us, but our profits will be reduced in eggs alone by thousands of dollars."

The price of protein-rich foods such as eggs and beef hit record levels this year, and at least some industry analysts blame the increases on bulging demand created by low carbohydrate diets. Meanwhile, Twin Cities-area bakeries, restaurants and consumers will have to grin and bear it while they wait for prices to moderate.

Egg prices broke record levels just before Thanksgiving, with wholesale prices averaging $1.22 a dozen in November. At the same time last year, prices averaged $0.85 to $0.86 a dozen, according to Mike Sheats, chief of Poultry Market News, the marketing division for the United States Department of Agriculture.

At Rick's Market in northeast Minneapolis, for example, a dozen jumbo eggs on Friday cost $1.79.

Even at these record prices, die-hard Atkins Diet fans such as Lisa Bajenske, who has been on the diet since March, aren't deterred. "It doesn't matter how much they are," she said, as she picked up an 18-count carton of eggs at the Rainbow Foods store in the Quarry shopping center in northeast Minneapolis. Bajenske, who has lost 60 pounds on the diet, and her husband eat at least a couple dozen eggs a week in large part because they're an inexpensive source of protein.

"Like all the other foods on the diet, I just don't care how much they cost," Bajenske said. "I buy them without thinking."

Sheats said production levels this year may be slightly lower than last year, but not enough to account for the increase in prices. But when a bout of Newcastle disease knocked out about 3 million birds and new animal care guidelines that limit how many birds can be in each cage were implemented, the egg market responded by driving up prices. A large order from Europe also helped heighten fears that there might be an egg shortage during the holidays, a peak time for egg consumption.

Since then, prices have moderated somewhat; during first two weeks of December prices remained above $1 a dozen. And on Friday, the wholesale cost of a dozen eggs dipped to $1.06 a dozen, $0.30 below their Thanksgiving peak, according to Gene Gregory, senior vice president of the United Egg Producers trade association.

That's welcome news to Elias Simbana, production manager at Franklin Street Bakery in south Minneapolis, where bakers use 1,500 pounds of liquid eggs a week, which are shipped to the baker in 30-pound pails. He said that last year he was paying 50 cents a pound; this month he's paying closer to $1 a pound.

"It's crazy," he said. While eggs are not the most expensive ingredient he uses, they do make up anywhere from 6 to 10 percent of some bread formulas. Nuts, for example, are more expensive, but he uses far less.

Gregory said that while consumers aren't happy, higher prices are good news for producers, who for several years scrambled to turn a profit while consumers shunned eggs based on warnings about high cholesterol. Now that reports contradict some earlier warnings, egg sales are rising -- and for the first time in four years, producers are turning a profit, he said.

And consumption is expected to rise. Right now, the average annual per capita consumption is 256 eggs in the United States, compared with nearly 400 in Japan. As production increases, prices are expected to moderate a bit, Sheats said. (Growers have found that giving the laying hens more room in the cages increases production.) "But it's going to take a while to take some of the starch out of the market," Sheats said.

Speaking of starch, it's hold-the-potatoes time at Twin Cities area steak houses, many of which are now seeing a resurgence in business as diners are in a meat mode again.

For many in the beef business, however, the impact of rising egg costs pales in comparison to the cost of serving beef, when it comes to total expenses.

"That's like worrying about the price of salt," said Phil Roberts, chairman and CEO of Manny's Steakhouse, Oceanaire Seafood Room and Figlio Restaurant and Bar.

Roberts is now paying about 30 percent more for beef than he did last year, but it's a premium he's happy to pay as long as people keep going out to eat. He said that he's reluctant to increase the cost of his steaks, so he plans to hold the line on his $34.95 Porterhouse steaks.

In fact, Roberts said his chefs are trying to cater to dedicated beef-eaters by coming up with low-carb options and selling more beef. At Figlio in Uptown, for example, you can now get an Atkins Burger: a juicy burger with no bun, a side of fluffy scrambled eggs and a couple slices of sizzling bacon. "We sell 20 a day," Roberts said.

Beef prices are up in large part because demand has been strong, but supply has been tight. Mad cow fears has limited beef from Canada, and the U.S. cattle herd has been shrinking as a drought has forced many farmers to sell their animals. Early this summer, cattle futures rose to 67 cents a pound and peaked at more than 90 cents a pound in September.

Roberts said that there's no question that diners are making low-carb, high-protein choices. It's impossible to ignore statistics that point to increased demand, Roberts said.

Although there's no comprehensive study to prove his thesis, Roberts said there's plenty of anecdotal evidence. Manny's Steakhouse is on track to end the year with record sales. And sales at Oceanaire are booming, too, as more people order fish with just olive oil and beef with no bread.

"You're seeing a lot of naked steaks," said Roberts. "It's a real thing."

Jim Buchta is at

jbuchta~startribune.com.

Ouch - I *thought* eggs used to be cheaper. Large eggs are $1.99 (CDN) a dozen at my local grocery store. I could have sworn they used to be $1.59.

Oh well - that's still a cheap source of protein.