OMAHA, Nevada – Egg producers are denounceing the avian flu outbreak by pushing the avian flu outbreak to record high prices, but critics believe giant companies are using market control to benefit handsomely at the expense of egg buyers across budgets.
Advocacy groups, Democrats and members of the Federal Trade Commission are calling for a government investigation after egg prices surged to a record average of $4.95 per dozen this month.
The Trump administration announced plans this week to fight the avian flu, but it has yet to be seen how it will ease egg prices (an important factor in inflation).
“Donald Trump promised to lower food prices on “day 1,” but he fired a worker charged with charges including bird flu because egg prices are out of control. Working families need relief now,” Sen. Elizabeth Warren said in a statement.
What’s behind the record egg price?
The industry and most experts are directly condemning the avian flu. More than 166 million birds have been slaughtered to contain the virus.
Since January, about 30 million egg layers have been wiped out, causing a major destruction of egg supply. The Ministry of Agriculture’s longstanding policy was to kill the entire flock every time the virus was discovered on a farm.
As a result, USDA estimates on February 1 showed that 292 million birds had lost around 12% in egg layers before the outbreak, but could be worse as 11 million more egg layers have been killed since.
The flock went over 300 million when the price surged to $4.82 two years ago, prompting the first call to a price gouging probe.
“This has nothing to do with anything other than avian flu, and I would suggest that others are misunderstandings of fact and reality, said Emily Metz, the chairman of the US eggs.
“Our farmers are in the battle of their lives, periods, complete halts, and they are doing everything they can to keep these birds safe,” Mets said. “This is a supply challenge. Because of the avian flu. There’s nothing else.”
Farm actions question exclusive behavior. A group lobbying on behalf of small farmers, consumers and rural communities said egg production has only dropped by around 4% since last year, with around 7.57 billion table eggs produced last month, but some consumers still empty egg shelves at local grocery stores.
“The dominant egg companies are denounced the bird flu for the price hike we see. But while egg supply has dropped slightly, the profits for these companies have skyrocketed,” said Angela Huffman, president of Farm Action. The Justice Department admitted to receiving a letter from a group seeking an investigation, but declined to comment on it.
The fact that the ju judge in 2023 determined that major egg producers would use various means to limit the domestic supply of eggs and raise the price of their products in the 2000s only adds to doubt about their current motivations.
What do the numbers indicate?
Retail egg prices generally remained below $2 per dozen before this outbreak began. Since then, prices have more than doubled, and egg producers’ profits have increased, even as they deal with rising costs.
Most of the major producers are private companies and do not publish their results. However, the largest calumane food, which supplies around 20% of the country’s eggs, has been published, and its profits have increased dramatically. Cal-Maine reported a profit of $229 million in the last quarter, when eggs were sold at an average of $2.74 per dozen. This is an increase from just $1.2 million in the last quarter when the outbreak was sold for $1.37 per dozen in early 2022.
Cal-Maine President and CEO Sherman Miller said he is reporting that the fiscal year continues to rise as the recent outbreak of highly pathogenic avian influenza has limited shell levels.
However, he said that Cal-Maine sold significantly more eggs in the quarter, as demand was so strong that Cal-Maine made many acquisitions. Outside of several facilities in Kansas and Texas, Calmaine also had few outbreaks on farms. The Mississippi-based company did not respond to calls from the Associated Press.
What about production costs?
Economists and analysts say record egg prices are not a sure sign of something creepy, and short-term profits may last until the farm is hit.
When a flock is slaughtered, it can take up to a year to clean the farm and raise new birds to spawn age.
The USDA pays farmers for all the birds killed, but does not cover all the farmers’ expenses as they go without income.
“I think consumers will probably feel like they’re getting the rough edge of the stick. But I guarantee you the farmers you have to depopulate the barn, they’re having a rough time,” said Cobank analyst Brian Ernest.
Inflation in the cost of feed, fuel and labor is contributing to the rise in egg prices, and farmers are investing in biosecurity measures to keep the virus away. Therefore, the production costs also appear to be at the highest ever, according to the U.S. Bureau of Labor Statistics producer price index.
“This is not the time they are raising prices to gouge the market. Prices are rising through auctions in wholesale. Jada Thompson, an agricultural economist at the University of Arkansas, said:
