Egg Producers' 'Egregious Profits' Raising Some Eyebrows

A US senator has joined farmers in calling for an investigation to crack the problem of soaring egg prices. Government data shows the national average retail price for a dozen eggs reached $4.25 in December, for a 138% increase from the $1.79 average a year earlier, though the average price nears $10 in some parts of the country, per Vice. All this has led to more shouts of price gouging, per the AP. Farm Action, a farmer-led advocacy group, has called for the FTC to investigate Cal-Maine Foods, the largest US egg producer, after it reported a 110% increase in quarterly sales and 600% increase in gross profits, per the Hill. Cal-Maine logged profits of $198.6 million in the second quarter of fiscal 2023, compared to $1.1 million a year earlier.

Cal-Maine says its eggs cost $2.71 a dozen on average in the most recent quarter, which is almost double the price of a year ago but well shy of the prices consumers are paying. In explaining the prices, set in negotiations with distributors and stores, the company cites increased demand, higher costs, and fewer chickens as a result of the avian flu outbreak. The slaughter of 43 million egg-laying chickens within the last year reduced the supply by 5% to 6%, per the AP. However, chickens have been laying more eggs on average, per Vice. Though some experts disagree, Farm Action's Joe Van Wye says supply concerns accompanied by a 22% increase in production and input costs since 2021 fails to explain the price spike.

There "appears to be a collusive scheme among industry leaders to turn inflationary conditions and an avian flu outbreak into an opportunity to extract egregious profits," said Farm Action, which has long warned about major firms driving up consumer prices, per the Hill. Sen. Jack Reed of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies added to the pile on Tuesday, asking the FTC to investigate "the industry's role in perpetuating high prices and hold those responsible accountable for their actions." The Rhode Island Democrat noted "small producers, which have faced many of the same market challenges as the biggest producers, have managed to keep prices under control." (More eggs stories.)