© Reuters. FILE PHOTO: An egg case is seen near empty at a Giant Food grocery store as the U.S. continues to experience supply chain disruptions in Washington, U.S., January 9, 2022. REUTERS/Sarah Silbiger /file photo
by Lea Douglas
(Reuters) – The Federal Trade Commission (FTC) should examine high egg prices for signs of price gouging by major egg companies, an agricultural group said, as Americans continue to pay more for the household staple than ever before.
U.S. regulators, farmers, and industry have often discussed in recent years the power of major agricultural companies to set prices and increase what consumers pay for groceries, such as when the price of beef skyrocketed in 2021.
The latest concern is eggs, whose price rose 138% in December from a year earlier, to $4.25 a dozen, according to the Bureau of Labor Statistics.
The US Department of Agriculture (USDA) has pointed to a record outbreak of bird flu as the reason for the high prices. But the nation’s antitrust regulator should also examine record profits at the top egg company, Farm Action said Thursday in a letter to FTC Chair Lina Khan.
Cal-Maine Foods (NASDAQ:), which controls 20% of the retail egg market, posted quarterly sales up 110% and gross profit up more than 600% over the same quarter last fiscal year, according to a report. report presented at the end of December before the Securities and Exchange Commission.
The company pointed to declining egg supplies across the country due to bird flu driving up prices as one reason for its record sales. The company has not had positive tests for bird flu at any of its farms.
US egg production was about 5% lower in October compared to last year, and egg inventories fell 29% in December compared to the beginning of the year, the latest data from the USDA, a significant drop, but one that may not explain the record. high prices, said Basel Musharbash, a Farm Action attorney.
“We want the FTC to investigate and see if consumers are being price gouged,” Musharbash said.
The FTC declined to comment.
In a statement, Cal-Maine said higher production costs, coupled with bird flu, were contributing to the higher prices.
The American Egg Board, an egg trading group, said in a statement that egg prices reflect a variety of factors and that wholesale egg prices are starting to fall.
Nearly 58 million chickens and turkeys have been killed by bird flu or to control the spread of the virus since early 2022, mostly in March and April, according to the USDA. The previous largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine shares have fallen in recent weeks after rising nearly 50% last year.
