NASDAQ-Adv: 1,695 Dec: 2,887 NYSE-Adv: 1,630 Dec: 2,434
The Federal Trade Commission (FTC) should examine high egg prices for signs of price gouging from top egg companies, a farm group said, as Americans continue to pay more than ever for the household staple.
U.S. regulators, farmers, and industry have often argued in recent years about the power of top agriculture firms to set prices and drive up what consumers pay for groceries, such as when the price of beef skyrocketed in 2021.
The latest concern is eggs, whose price was up 138% in December from a year prior, to $4.25 a dozen, according to the Bureau of Labor Statistics.
The U.S. Department of Agriculture (USDA) has pointed to a record outbreak of avian flu as a reason for the high prices. But the nation’s antitrust regulator should also examine record-high profits at the top egg company, said Farm Action on Thursday in a letter to FTC chair Lina Khan.
Cal-Maine Foods (CALM.O), which controls 20% of the retail egg market, reported quarterly sales up 110% and gross profits up more than 600% over the same quarter in the prior fiscal year, according to a late December filing with the Securities and Exchange Commission.
In the filing, the company pointed to decreased egg supply nationwide due to avian flu driving up prices as a reason for its record sales. The company has had no positive avian flu tests on any of its farms.
U.S. egg production was about 5% lower in October compared to last year, and egg inventories were down 29% in December compared to the beginning of the year, the latest USDA data shows – a significant drop, but one that may not explain record-high prices, said Basel Musharbash, an attorney with Farm Action.
“We want the FTC to dig in and see if consumers are being price gouged,” Musharbash said.
The FTC declined to comment. Cal-Maine did not respond to a request for comment.
The American Egg Board, an egg marketing group, said in a statement that egg prices reflect a variety of factors and that wholesale egg prices are beginning to fall.
Nearly 58 million chickens and turkeys have been killed by avian flu or to control the spread of the virus since the beginning of 2022, mostly in March and April, according to USDA. The previous largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine shares have fallen in recent weeks after climbing almost 50% last year.
Source: Reuters (Reporting by Leah Douglas Editing by Bill Berkrot)