Senator calls for investigation into egg price gouging
Sen. Jack Reed (DR.I.) is calling on the Federal Trade Commission (FTC) to investigate soaring egg prices.
Egg prices have more than doubled since last year, from $1.79 in December 2021 to $4.25 in December 2022, according to the Bureau of Labor Statistics.
In a letter on Tuesday, Reed called on the FTC to investigate whether the egg industry is using a record and outbreak of bird flu as a cover for price gouging.
Reed is on the Senate Appropriations Labor, Health and Human Services, Education, and Related Agencies Subcommittee.
“At a time when food prices are high and many Americans are struggling to afford their groceries, we must examine the industry’s role in perpetuating high prices and hold those responsible accountable for their actions,” Reed wrote.
He also noted that “small producers, which have faced many of the same market challenges as the biggest producers, have managed to keep prices under control.”
Reed’s letter builds on a campaign by farm rights group Farm Action, which called last week for the Federal Trade Commission to investigate Cal-Maine Foods, which controls 20 percent of the retail egg market.
Amid the flu crisis, the company reported quarterly sales up 110 percent and gross profits up more than 600 percent over the same quarter in the prior fiscal year, according to Farm Action.
In a statement to Equilibrium, Cal-Main argued that its prices are a result of more demand, higher input costs and fewer chickens.
“The domestic egg market has always been intensely competitive and highly volatile even under normal market circumstances,” a Cal-Main spokesperson wrote.
“Even in this time of higher prices, the nutritional content of eggs remains a great value for consumers,” the statement continued.
Avian flu, also known as highly pathogenic avian influenza (HPAI), is a virus that primarily affects birds, particularly chickens and turkeys.
The current outbreak, which began in early 2022, is the worst in US history and has led to nearly 58 million poultry deaths in 47 states, according to the US Department of Agriculture.
But Farm Action says that’s unpersuasive. “Yes, there has been an avian flu epidemic, but at no point have flocks been more than six percent below where they were last year,” Joe Van Wye of Farm Action told Equilibrium.
And though the flu is ravaging the industry, “Cal-Maine hasn’t reported a single case of avian flu — but they’re raking in 10 times the profits they were last year,” Van Wye added.
In the broader grocery market, “prices went up about 12 percent — not this, you know, 130 percent increase that we’re seeing in the egg market,” he said.
Similarly, he said, production and input costs are 22 percent higher than they were in 2021 — which is again much lower than the observed price increase.
However, the price increases observed in the egg sector was “much larger than the decreases in production” caused by the avian flu.
Farm Action believes the spike in egg prices is part of a larger problem. The group has long argued that overconsolidation in the animal protein industry has allowed corporations to act like monopolies — charging ever more from consumers while paying farmers less, as we reported.
It points to a 2019 fire at Tyson slaughterhouse in Kansas, which led to widespread beef price increases.
“They used that [fire] to justify an increase in prices — but then you know, continue to continue to slaughter more cattle than they did before that fire, so that there was really no impact on their actual supply,” Van Wye said.