Topline
Egg prices have soared 70%—at a median cost of $4.82—amid claims from one advocacy group that suppliers are in a “collusive scheme” to keep prices high to maximize profits.
Key Facts
New data from the Consumer Price Index (CPI) shows egg prices have risen 70% in January 2023 compared to last January’s prices and grew 8.5% more than December prices.
Despite rising egg prices, consumers can expect some relief coming as a U.S. Department of Agriculture report shows wholesale egg prices are lowering on a weekly basis.
Farm Action, an advocacy group critical of large agribusiness, had already claimed in a January 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.
High prices in 2022 have largely been attributed to an avian flu outbreak, which has so far affected 58 million chickens as of January, according to data from the U.S. Department of Agriculture.
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.
Key Background
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.
Chief Critics
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.”
Further Readings
Why Are Egg Prices Still So High? It’s Not The Reason You Think (Forbes)
Flu, Feed and Fuel Have Made Eggs Really Expensive (Forbes)