U.S. egg producers have seen an unprecedented surge in profits, due to climbing prices.
This is raising concerns among a farmer-led advocacy group bent on creating fair food practices and pushing the Federal Trade Commission (FTC) to probe potential antitrust violations that could return refunds back to consumers.
Possibility of Foul Play by Major Egg Producers
Ahead of their upcoming testimony at the FTC, Farm Action sent a strongly worded letter to Chair Lina Khan, highlighting possible foul play by several major egg producers.
The organization laid out fears about potential price manipulation and other anti-consumer tactics employed by businesses, including Rose Acre Farms, Cal-Maine Foods, Hillandale Farms, and Versova Holdings.
NEW: The FTC should examine high egg prices for signs of price gouging from top egg companies, argues a farm group.
Egg prices are up 138%. At top egg producer Cal-Maine – which has 20% market share – gross profits are up more than 600%.
— Leah Douglas (@leahjdouglas) January 20, 2023
Last year, shoppers scrambled to deal with skyrocketing egg prices.
A dozen large Grade As had jumped from an average of $1.79 in December 2021 up to a whopping $4.25 just one year later! According to Farm Action, this dramatic shift caused financial strain for many consumers across the country.
The egg market is facing a perfect storm of circumstances that has drastically driven up prices, due to supply disruption caused by the worst avian influenza outbreak in U.S. history. That’s according to major producers and their allies who are labeling it an “act of God.”
Despite the severity of an avian flu outbreak in 2022, Farm Action’s analysis suggests its effect on egg supply was negligible.
With 43 million hens killed by the virus nationwide, it appears farmers were able to compensate for this loss with minimal disruption to consumers’ access and availability of eggs.
Egg Producers Called Out
Nevertheless, an unprecedented rally in wholesale egg prices has left the industry scrambling, pushing rates to never-before-seen levels.
— Common Dreams (@commondreams) January 19, 2023
In February 2020, shell eggs sold for 173.5 cents per dozen. Just one month later, that rate jumped dramatically to 194.2 cents and continued rising until peaking at over 400 cents by October of the same year.
It dipped slightly in August, then continued its upward momentum again, reaching almost 450 cents per dozen this December, making it a rapid increase with no signs of slowing down yet.
Farm Action is calling out major egg producers for dramatically raising prices without cause. Although the avian flu outbreak and rising feed/fuel costs have been cited as causes of inflation, recent investment documents suggest these explanations may be inaccurate.
Cal-Maine, the nation’s premier distributor of eggs and other egg products, is celebrating improved profitability in recent months thanks to higher selling prices and smart cost-control techniques.
Max Bowman, the corporation’s Chief Financial Officer, noted that their market strategies had allowed them to successfully adapt when encountering inflationary pressures along the way.
Last week, CNN reported there have been no positive tests of avian flu at any Cal-Maine facilities.
Despite this, the company’s net average selling price per dozen conventional eggs has seen a huge surge in profit from last year; its market share now stands at 20%.
Popular brands under their umbrella include Farmhouse Eggs and Egg-Land’s Best among others, thereby fueling an egg revolution for consumers throughout America.