Foul play! Egg prices soared a record-breaking 60% in 2022 with farm advocacy group blaming 'collusive scheme' among producers to 'extract egregious profits as high as 40%'

  • Across all egg types, the average price spiked by 59.9% - the largest increase of any US goods. By comparison, food prices across the board were up 10.4% 
  • Avian flu was blamed for the increase after more than 40m egg-laying hens were culled in the US last year, marking the worst outbreak on record
  • But Farm Action says the 'real culprit' are major egg producers who are using the pandemic to 'extort billions of dollars from the pockets of ordinary Americans' 

Egg prices soared by a record-breaking 60% last year as a farm advocacy group accused the industry of a 'collusive scheme' to extract profit from families.

Across all egg types, the average price spiked by 59.9% - the largest increase of any US goods. By comparison, food prices across the board were up 10.4%.

The increase was even greater for grade A, large eggs which soared to $4.25 per dozen in December - up by almost 140% from $1.79 in the same month last year.

Avian flu was blamed for the staggering increase after more than 40m egg-laying hens were culled in the US last year, marking the worst outbreak on record. 

However, Farm Action, a farmer-led advocacy group, says the 'real culprit' are major egg producers who are leveraging the avian flu pandemic to 'extract egregious profits reaching as high as 40%.'

Across all egg types, the average price spiked by 59.9% - the largest increase of any US goods. By comparison, food prices across the board were up 10.4%

Across all egg types, the average price spiked by 59.9% - the largest increase of any US goods. By comparison, food prices across the board were up 10.4%

The increase was even greater for grade A, large eggs which soared to $4.25 per dozen in December - up by almost 140% from $1.79 in the same month last year

The increase was even greater for grade A, large eggs which soared to $4.25 per dozen in December - up by almost 140% from $1.79 in the same month last year

In a letter to the Federal Trade Commission sent Thursday, the group claimed that 'the production and distribution of eggs in the United States is dominated by a handful of companies led by Cal-Maine Foods.'

Cal-Maine, which has some 47m egg-laying hens, controls around a fifth of the egg market.

BIRD FLU: EVERYTHING YOU NEED TO KNOW

What is it? Bird flu is the source of all human flus, as far as we know.

It often passes through another animal, such as a pig, in the process of mutating and adapting to infect us.

Wild birds are carriers, especially through migration.

As they cluster together to breed, the virus spreads rapidly and is then carried to other parts of the globe.

New strains tend to appear first in Asia, from where more than 60 species of shore birds, waders and waterfowl, including plovers, godwits and ducks, head off to Alaska to breed and mix with various migratory birds from the Americas. Others go west and infect European species. 

Can it infect people? Yes, but just 860 people have been infected with H5N1 globally since 2003 from 18 countries.

The risk to people has been deemed 'low'.

But people are strongly urged not to touch sick or dead birds because the virus is lethal, killing 53 per cent of people it does manage to infect. 

Should I be concerned? Not particularly.

Poultry farmers and people who handle wild birds are most at risk.

Scientists say there is a tiny chance a double infection of avian and seasonal flu could allow the current bird flu strain to adapt to be able to spread between people, but it remains highly unlikely. 

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The letter claims that 'leading firms in the industry have a history of engaging in 'cartelistic conspiracies' to ... increase prices for consumers.'

Farm Action argues that although the avian flu outbreak was significant, 'its actual impact on the egg supply was minimal.'

It states that the average size of the egg-laying flock in any given month of 2022 was never more than 7-8% lower than in 2021.

The affect of avian flu was further 'blunted' by record-high lay rates among the surviving hens throughout the year - up to 4% higher than the average in previous years.

'Notwithstanding the 2022 avian flu outbreak's apparently mild impact on the industry, egg prices skyrocketed after it hit,' Farm Action states, adding that the weekly wholesale price of eggs rose from 173.5 cents per dozen at the end of February to almost 450 cents per dozen in the first weeks of December.

It notes the broader inflationary pressures of rising feed and fuel prices, but here too, Farm Action, argues the numbers do not stack.

Cal-Maine told investors this month that total farm production and feed costs in 2022 were only 22% higher than last year.

Farm Action states that 'Cal-Maine's gross profits increased in lockstep with rising egg prices through every quarter of the year.'

The company reported profits of almost $92m in the quarter ending February 26, 2022, to just under $318 million in the quarter ending on November 26, 2022. 

The advocacy group says that, 'in a truly competitive market', rival egg producers would be expected to respond to the near-trebling in prices by undercutting Cal-Maine's profit margin.

This lack of competition 'raises significant concerns about monopoly power and potential antitrust violations in this sector,' Farm Action said.

The group accuses Cal-Maine of 'organized theft' and 'extort[ing] billions of dollars from the pockets of ordinary Americans through what amounts to a tax on a staple we all need: eggs.' 

Farm Action conclude by urging the FTC to open an urgent investigation into the egg industry to 'get the American people their money back.'

In a statement rebutting the claims, Max Bowman, Cal-Maine's Vice President and Chief Financial Officer, said avian flu had significantly impacted egg supply while consumer demand remained high.

Bowman added that, like other industries, it was suffering from increased costs of feed, labor, fuel and packaging.

More than 40 million egg-laying hens were culled due to bird flu in the US last year , marking the worst outbreak on record. The avian pandemic coupled with soaring feed, fuel and labor costs has hammered farmers and pushed egg prices higher

More than 40 million egg-laying hens were culled due to bird flu in the US last year , marking the worst outbreak on record. The avian pandemic coupled with soaring feed, fuel and labor costs has hammered farmers and pushed egg prices higher

'Cal-Maine Foods wants to assure its customers we are doing everything we can to maximize production and keep store shelves stocked,' Bowman said.

'Cal-Maine Foods is proud of its mission to be the most sustainable producer and reliable supplier of fresh shell eggs and egg products in the United States.'

The FTC declined to comment as per policy regarding letters, petitions or complaints received from third parties.

However, industry experts were doubtful that any probe would find wrongdoing.

'I don't think we've seen anything that makes us think that there's something there other than normal economics happening right now,' said Amy Smith, vice president at Advanced Economic Solutions.

'I think it was just kind of a perfect storm of stuff that came together,' she told CNBC

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