As egg prices have soared 59%—at a median cost of $4.25—one advocacy group claims egg suppliers are in a “collusive scheme” to keep prices high to maximize profits.
Farm Action, an advocacy group critical of large agribusiness, claims in a letter to the Federal Trade Commission (FTC) that it should investigate egg suppliers for “price gouging” and “price coordination” by dominant egg producers including Cal-Maine foods and Rose Acre Farms.
According to Farm Action, egg producers saw a 40% increase in profits last year, and are accusing them of turning the avian flu and inflation into an “opportunity to extract egregious profits,” says the group.
Cal-Maine Foods, one of the largest egg producers in the country, denied the allegations, as Max Bowman, the chief financial officer and vice-president, told CNBC that apart from the avian flu, increasing costs of labor, hen feed and fuel contributed to higher egg production costs.
Egg prices across the country hit record level prices in 2022 as they are selling for more than twice the median price from 2021 ($1.78). The avian flu started back in February 2022 with Iowa, the largest egg producer in the U.S., hit the hardest and before it spread to 47 other states. In 2015, the previous avian flu outbreak affected 21 states and 50 million birds were culled as a result of containing the spread of the flu and was, at the time, the most serious animal health event according to a USDA report.
While Farm Action is pushing the FTC to investigate egg producers for the sudden jump in egg prices, economists believe it is simply current events that affected the price at the supermarket. “I don’t think we’ve seen anything that makes us think that there’s something there other than normal economics happening right now,” Amy Smith, vice president at Advanced Economic Solutions told CNBC. “I think it was just kind of a perfect storm of stuff that came together.”