Senator calls for investigation into egg price hike

Senator calls for investigation into egg price hike

Sen. Jack Reed (DR.I.) is asking the Federal Trade Commission (FTC) to investigate soaring egg prices.

The price of eggs has 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 Tuesday letter, Reed called on the FTC to investigate whether the egg industry is using a record outbreak of bird flu as a cover for price gouging.

Reed serves on the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies.

“At a time when food prices are high and many Americans are struggling to pay for their groceries, we need to look at the industry’s role in perpetuating high prices and hold those responsible accountable for their actions,” Reed wrote.

He also noted that “small producers, who have faced many of the same market challenges as larger producers, have managed to keep prices in check.”

Reed’s letter builds on a campaign by farm rights group Farm Action, which last week called on the Federal Trade Commission to investigate Cal-Maine Foods, which controls 20% of the retail egg market.

Amid the flu crisis, the company saw quarterly sales up 110% and gross profits up more than 600% from the same quarter a year earlier, according to Farm Action.

In a statement to Equilibrium, Cal-Main argued that its prices were the result of increased demand, higher input costs and fewer chickens.

“The domestic egg market has always been fiercely 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 of great value to consumers,” the statement continued.

Bird flu, also known as highly pathogenic avian influenza (HPAI), is a virus that primarily affects birds, especially chickens and turkeys.

The current outbreak, which began in early 2022, is the worst in US history and has killed nearly 58 million poultry in 47 states, according to the US Department of Agriculture.

But Farm Action says that’s not convincing. “Yes, there was an outbreak of bird flu, but at no time were the flocks more than six percent lower than they were last year,” said Joe Van Wye of Farm Action. at Equilibrium.

And although the flu is ravaging the industry, “Cal-Maine hasn’t reported a single case of bird flu – but they’re raking in 10 times the profit they made last year,” Van Wye added.

In the broader grocery market, “prices are up about 12% — not that 130% increase we’re seeing in the egg market,” he said.

Likewise, he said, production and input costs are 22% higher than they were in 2021 – again well below the price increase seen.

However, the price increases seen in the egg sector were “much larger than the production declines” 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 over-consolidation in the animal protein industry has allowed companies to act like monopolies – consistently charging consumers more while paying farmers less, as we reported.

It points to a 2019 fire at the Tyson slaughterhouse in Kansas that led to a widespread increase in beef prices.

“They used that [fire] to justify a price increase – but then, you know, keep slaughtering more cattle than before the fire, so there’s really no impact on their actual supply,” Van Wye said.

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