Justice Department investigating egg industry for price increase
The U.S. Department of Justice (DOJ) recently initiated an inquiry into major egg producers suspecting potential price coordination and market manipulation, which might have contributed to the significant surge in egg prices. The DOJ’s Antitrust Division is leading the investigation, focusing on whether producers shared supply and pricing information to artificially inflate costs for consumers.
Egg prices have surged by over 100% since January 2024, with wholesale prices exceeding $8 per dozen recently. However, there was a slight decline with the latest U.S. Department of Agriculture (USDA) report indicating a national average wholesale price of $6.85 per dozen. Producers have linked these skyrocketing costs to avian flu outbreaks, resulting in decreased supply. Nonetheless, lawmakers and consumer advocacy groups have raised concerns about potential corporate profiteering influencing the price spike.
Democrat lawmakers, led by Senator Elizabeth Warren (D-Mass.), have urged the Biden administration to intervene and address the escalating food prices. They accused major grocery chains and egg producers of leveraging supply chain challenges to maximize profits. Warren stated that egg producers and grocery stores might exploit the avian flu outbreak to restrict supply or raise egg prices for profit gains.
Emily Metz, CEO of the American Egg Board, refuted allegations of price-fixing, asserting that egg farmers do not determine prices but are influenced by market forces. Metz attributed the increased costs to the avian flu crisis and sustained consumer demand for eggs. The consolidation of the egg industry has seen Cal-Maine Foods emerge as the largest producer in the U.S., reporting a significant surge in gross profits in its recent SEC filing due to rising egg prices and limited supply amid the avian flu outbreak.
Cal-Maine Foods, despite denying any wrongdoing, previously lost a price-fixing lawsuit in 2023 and was required to pay substantial damages. The company did not respond to requests for comments on the current investigation. Even as wholesale egg prices start to decline, experts caution that consumers may not see immediate relief at supermarkets as retailers may maintain higher prices to recoup earlier losses.
The DOJ’s investigation is at a preliminary stage, with the outcome regarding potential legal actions against egg producers remaining uncertain. Nonetheless, consumer advocacy groups, including Farm Action, have commended the investigation, emphasizing the need to address corporate influence on food prices. The probe’s results, along with potential regulatory actions, could have significant implications for consumers and the broader egg industry.
