Cost plus inflation mostly happens as a result of increase in the cost of production that affects price of products.
So back in Nigeria I discovered the price of eggs was on the rise and as a result it rose from around #30 I think before 2020 to #250 Nigerian Naira presently which is the current price that's over 700% increment in the price of eggs.
So I decided to dig deeper into what caused the increment in the price of eggs by going directly to the source of egg which are the chicken that lays the egg and I discovered that chicken feed has also been on the rise itself making it difficult for farmers to take care of their birds.
In 2022 25kg bags of starter feed ranged between 5,000 naira to 8,000 depending on location breeds of your birds and Brand naira but fast forward to 2025 that same 25kg bag is now selling between 22-25 thousand Naira which is nearly close to 300% increase.
Now this hike in prices has made it many difficult for poultry farmers to continue their business and forced most out of business creating a supply shortage which didn't help with price as it pushed the price of eggs very high.
But what caused the rise in the price of chicken feed.
Chicken feed is made mostly from corn and other imported items and I also discovered the price of corn also went up.
The government made a policy that restricted the importation of maize into the country for reasons best known to them probably to increase local production but the issue is that local production couldn't satisfy local consumption and the insecurity in the part of the country where farmers mostly stays so these changes creates a huge shortage in supply and the price of maize went up.
Also Nigerian government removed fuel subsidy which increased the price of transportation also making logistics difficult.
So that's definitely how cost push inflation happens a little change in one can thing can cause a spike and affect many other things.