Egg costs have climbed 150 % over the past yr whereas the highest egg producer has raked in file earnings.
Sen. Elizabeth Warren (D-Massachusetts) is demanding solutions from the U.S.’s prime egg producers as egg costs have soared in latest months, elevating questions on whether or not the business is taking part in anti-competitive behaviors and worth gouging.
In letters despatched to the highest 5 egg producers within the U.S. on Thursday, Warren and Sen. Katie Porter (D-California) known as on companies to elucidate their rationale for growing egg costs and supply particulars on latest government bonuses and will increase in firm earnings.
Egg producers could also be utilizing avian flu and provide chain points as excuses to “pad their very own earnings on the expense of American households,” they stated.
In accordance with information from the Bureau of Labor Statistics, egg costs were up 150 percent in January from the earlier yr, reaching an average of $4.82 a dozen throughout the U.S.
In the meantime, the nation’s prime egg producer, Cal-Maine Meals, which controls 20 % of the retail market, has been recording file earnings; in December, Cal-Maine’s gross quarterly earnings elevated by more than 600 percent over earnings from the identical time period 2021, and by 65 % yearly.
Although authorities officers and the business have pointed to an outbreak of avian flu to justify the worth will increase, Cal-Maine has had zero constructive avian flu assessments on its farms, and Cal-Maine stated that its file earnings final yr had been “driven by record average conventional egg selling price.”
“This can be a sample we’ve seen too typically because the COVID-19 pandemic: corporations jacking up their costs to pad their very own earnings, placing an extra burden on American households and the financial system as an entire,” the lawmakers wrote of their letters to Hillandale Farms, Dawn Meals, Cal-Maine Meals, Versova Administration and Middle Recent Group and Rose Acre Farms.
“American households working to place meals on the desk need to know whether or not the elevated costs they’re paying for eggs symbolize a reputable response to lowered provide or out-of-control company greed,” they continued.
Latest hikes in egg costs have prompted lawmakers and farm groups to ask the Federal Commerce Fee (FTC) to provoke an antitrust investigation into the highest producers. Final month, advocacy group Farm Action wrote to FTC Chair Lina Khan, saying that the affect of the provision chain and avian flu was minimal on manufacturing — whereas flock sizes had been lowered by not more than 7 to eight % over the earlier yr, there have been record-high charges of egg laying among the many remaining hens.
“Opposite to business narratives, the rise within the worth of eggs has not been an ‘Act of God’ — it has been easy profiteering,” Farm Motion wrote.
Because the lawmakers identified of their letters, this might not be the primary time that egg producers have confronted scrutiny from antitrust regulators if the FTC selected to research. In 2020, New York Lawyer Normal Letitia James filed a lawsuit in opposition to Hillandale Farms, the U.S.’s second-largest egg producer, for “illegally gouging the worth of eggs” in the course of the pandemic. The lawsuit was ultimately settled out of court docket.