MARYLAND — Imagine owning a small business. Now, imagine that one of your most important resources doubled in price.
That’s exactly what Maryland bakers face.
A highly contagious bird flu has disrupted the egg supply chain and killed millions of chickens nationwide. The ensuing egg price hikes have eaten into bakery profits and forced owners to adapt their menus.
Steve O’Leary, 32, and Tom Giancola, 40, are battling this firsthand. The two friends and peers each opened their bakeries in summer 2020. They have since overcome the recent egg price instability.
“It’s scary,” O’Leary told Patch in an exclusive interview. “We want to give the best bang for the buck to our customers, while also making sure that we have money in our bank account to keep the business running.”
O’Leary operates Black Market Bakers with his older brother, Brendan (35), and his father, Tom (almost 70). The family also owns Chevys Fresh Mex in Annapolis, where their bakery started in a food truck in August 2020.
O’Leary and his dad in December 2021 advanced to the finals of “Baking It,” a cooking show streaming on Peacock. The Annapolis family in April 2022 opened their brick-and-mortar shop, which is located in Edgewater at 155 Mitchells Chance Road.
Black Market Bakers is known for its pastries, serving more than 1,000 blueberry lemon scones each week. The bakery is also ramping up its bread production as of late.
Giancola launched Makeathe, pronounced “Make uh thuh,” in July 2020. He spent around 10 months building a commercial kitchen in his basement from 2021 into 2022.
The Annapolis resident now sells his bread weekly at the Anne Arundel County Farmers Market in Annapolis and monthly at the Honey’s Harvest Farm sale in Lothian. Makeathe dishes out roughly 100 loaves of homemade bread each week. Giancola also offers pastries, but bread is his bestseller.
“There’s only a certain price point that you can charge a consumer for these items,” Giancola said. “If my prices went up threefold, I can’t necessarily adjust my final sales price for that.”
Both bakers have seen their costs multiply.
Giancola paid about $1.45 per dozen of eggs in 2021 before the bird flu. O’Leary’s price was similar.
O’Leary’s bill peaked at $6.16 per dozen this January. The market has since settled down, but prices have not yet returned to their historical levels.
Giancola is still paying $3.98 per dozen compared to O’Leary’s $2.70.
That price is pesky when bakers rely on eggs. Giancola, who has fewer recipes that call for eggs, uses two or three dozen eggs per week. O’Leary, a pastry chef dependent on eggs, uses about 400 dozen per week.
Both businesses have remained profitable, but they have taken different steps to manage costs.
Black Market Bakers prioritizes different egg-heavy foods.
Some recipes only call for egg yolks, so Black Market Bakers saves the egg whites to make other sweets like meringue and marshmallow fluff.
This helps O’Leary double dip and maximize the value of a single egg.
Black Market Bakers has not raised any of its prices, even though ingredients cost roughly 5 percent more than they prefer. O’Leary’s biggest expenses are currently eggs, butter and dairy.
“If every product went up 100 percent like the eggs did, then we would certainly have to make changes,” O’Leary said.
The bakery is still stable enough to expand.
Black Market Bakers plans to open a second location in mid-April. That bakery will be in the Port Annapolis Marina, located at 7074 Bembe Beach Road.
Makeathe, on the other hand, is still saving to move into a brick-and-mortar location. Giancola had hoped to be in a full bakery by now, but the price fluctuations have made it harder to project his business growth.
“They’ve just been so wildly unpredictable,” Giancola said of ingredient prices. “It’s really hard to forecast … where will we have the confidence to take that investment in ourself to the next level?”
Giancola has also slowed his charitable giving. Makeathe dedicates a portion of its profits to baking for food drives.
With tighter profit margins, Giancola has not been able to donate as much as he would like. The farmers market baker has started asking customers if they want to buy a slice for charity. This has supplemented, but not replaced, the lost charitable revenue.
Makeathe has also changed its menu as prices continue to fluctuate.
Giancola cut out brownies and brioche doughs when egg prices skyrocketed. He also pulled laminated doughs and chocolate croissants when the cost of butter soared.
Makeathe is paying $3.56 per pound of butter. That’s up from $1.75 per pound in 2021.
Luckily for Giancola, the peaks of egg and butter prices did not overlap. That’s let him keep most of his menu intact at any given time.
Giancola has not raised his prices, except for fancier pastries which have increased by $1 over three years.
Instead, Giancola trimmed his packaging expenses to avoid a drop in the quality or size of his food.
Makeathe is working on cutting its costs per label from about 15 cents down to a penny. Giancola is also buying boxes in bulk to secure a cheaper rate.
“We’re really just trying to hold the line and absorb the costs in other parts of our business,” Giancola said.
Bakers are not the only ones struggling with the egg situation. Poultry farmers around the country are losing their entire flocks to the bird flu, which has a 90 to 100 percent mortality rate in chickens.
The bird flu, also known as highly pathogenic avian influenza or HPAI, has decimated flocks over the past year.
In January 2022, the U.S. detected its first case in wild birds since 2016. The virus reached a commercial turkey poultry farm the next month. That was the country’s first commercial infection since 2020.
Maryland Department of Agriculture spokesperson Jessica Hackett said the disease has since “spread like wildfire.”
The bird flu has hit 804 flocks and prompted almost 59 million bird deaths around the U.S.
The only states that have escaped unscathed are Hawaii, Louisiana and West Virginia.
The Maryland outbreak has infected five commercial flocks and one backyard flock. That’s led to the death of nearly 1.8 million birds, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service reported.
Cases arrived in a swarm in March 2022 and did not return until that fall. Maryland hasn’t recorded an infection in about four months, but another outbreak could begin at any time.
“Maryland is still on high alert,” Hackett, 41, said. “We’re just standing by prepared.”
The USDA requires farmers to depopulate, or slaughter, their whole flock after a single positive case. Farmers cannot sell any of these chickens to consumers.
This helps contain the spread of the bird flu, but it is still detrimental to farmers. Farms can spend a month going through inspections before the USDA clears them to return to full capacity. Every affected Maryland farm has since passed its follow-up checks and resumed production.
The USDA reimburses farmers who lose their flocks. Nearby farms, however, can also face selling restrictions until their neighbor’s quarantine is lifted. That means a positive case can lead to thousands of chicken deaths and multiple farmers losing income.
“It’s a financial hardship for sure to the farmers,” Hackett said.
Hackett said the Maryland Department of Agriculture is working with farmers on improving their biosecurity to slow the spread of the bird flu.
The virus spreads mostly through wild bird droppings. Humans can track these droppings into a chicken coop or they can enter the building’s ventilation. Either of these could lead to an outbreak.
There is not currently a cure or a vaccine for chickens, Hackett said.
Hackett recommended limiting farm visitors, maintaining a guest log and keeping a pair of boots to wear only in the henhouse.
Though chickens are at high risk, humans face little threat of catching the bird flu.
The U.S. saw its lone human case in April 2022. The Centers for Disease Control and Prevention has only reported 10 human infections worldwide since July 2021. The CDC also said there has not been any known human-to-human spread of the bird flu.
Human cases have ranged in severity from no symptoms to serious disease resulting in death. Flu antiviral drugs can treat humans who do get sick. The federal government is developing bird flu vaccines for humans in case they are needed.
Still, a limited supply of chickens means eggs are at a premium. The increased demand this winter holiday season strained that already reduced availability, Hackett said, leading to the price hikes.
“Economics 101 is what’s driving these egg prices,” Hackett said.
The egg demand is stabilizing, but the supply is still limited. Bird flu cases have slowed but not stopped.
Hackett predicted that egg prices could creep upward around Easter, but she does not expect as drastic of a price jump if there is one at all.
A dozen large white eggs cost as low as $1.20 in June 2019 before the COVID-19 pandemic sparked inflation and supply chain issues. Eggs were $2.05 a year ago in American cities, according to the U.S. Bureau of Labor Statistics.
Eggs are noticeably more expensive now. The average consumer price soared to $4.82 per dozen this January and has since receded to a nationwide average of $4.21.
Patch visited Giant Food in Annapolis, Safeway in Annapolis and Weis Markets in Edgewater to check prices on March 6.
We recorded 44 unique egg prices. The options varied in quantity, size, color and whether they were organic or cage-free.
The average price was $5.64 per dozen when counting every type of egg. That average fell to $4.42 when we narrowed the selection down to large white eggs that were not organic or cage-free.
The cheapest option was at the Edgewater Weis. The store brand offered 18 large white eggs for $2.99 with a rewards card. That’s equivalent to $1.99 per dozen. These eggs were not organic or cage-free.
The Annapolis Safeway had the most expensive option. The Country Hen sold a $4.99 carton of six large brown eggs. That’s equal to $9.98 per dozen. These eggs were organic and cage-free.
Black Market Bakers thinks these elevated prices help customers understand what the eatery is going through.
“They’re seeing the same price increase at the grocery store,” O’Leary said.
Given these prices, the Maryland Department of Agriculture has noticed an increase in backyard chicken flocks. Hackett doesn’t think these flocks are the answer, however.
“It’s not necessarily a good solution because it’s very expensive,” Hackett said. “Is it going to save money? Probably not.”
Visit blackmarketbakers.com, makeathe.com and mda.maryland.gov to learn more.
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