Spike in egg prices leads senator to call for price-gouging investigation
Sen. Jack Reed on Monday called for the Federal Trade Commission to open an investigation into “potential price gouging and other deceptive practices” as egg prices have spiked.
The Rhode Island Democrat noted in a letter to the agency’s chair, Lina Khan, that the price of a dozen eggs climbed 138% in December compared with the same time a year prior, citing data from the Bureau of Labor Statistics.
Egg prices in December climbed to $4.25 from $1.79 during the same period in 2021, a 138% increase, according to data from the Bureau of Labor Statistics.
The spike in egg prices has been attributed to the millions of chickens that were slaughtered to limit the spread of bird flu and farmers having to compensate for inflation driving up their costs.
The largest US producer of eggs, Cal-Maine Foods, was singled out by Reed because it reported last month that its quarterly sales had jumped 110% to $801.7 million on the record egg prices, helping it generate a $198.6 million profit, up from just $1.1 million a year earlier.
US FARM GROUP CALLS FOR PROBE OF HIGH EGG PRICES
“Consumers are used to seeing some volatility in the egg pricing market, but the current price spike in the industry’s favor warrants careful scrutiny. Independent federal watchdogs should look at the facts and follow the evidence to ensure consumers are treated fairly,” he said in the letter to the FTC. Reed noted that the Department of Agriculture had found the price increase in the sector was “much larger than the decreases in production” caused by the avian flu.
Even though around 43 million of the 58 million birds slaughtered over the past year to help control the flu have been egg-laying chickens, the size of the total flock has only been down 5% to 6% at any one time from its normal size. of about 320 million hens.
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“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.
A farmer-led advocacy group called Farm Action made a similar request last week. It argued that 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.”
Cal-Maine Foods told FOX Business in a statement that it “wants to assure its customers we are doing everything we can to maximize production and keep store shelves stocked” and that the “domestic egg market has always been intensely competitive and highly volatile even under normal market circumstances.”
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The prices the Mississippi-based company charges are determined by negotiations with the grocery store chains, club stores and distributors it sells to.
Cal-Maine said its prices averaged $2.71 a dozen in the most recent quarter. That’s almost double the $1.37 it was getting a year earlier, but still lower than the prices consumers are paying.
The Associated Press contributed to this report.