Jamie Spencer
Egg prices have soared to record highs, reaching an average of $4.95 per dozen this month, leading to accusations of price gouging and calls for a government investigation. While egg producers attribute the spike to a devastating bird flu outbreak, critics claim major companies are exploiting their market dominance to maximize profits.
Bird Flu Outbreak and Supply Challenges
The egg industry and most experts point to bird flu as the primary driver of skyrocketing prices. More than 166 million birds have been culled to contain the virus, including 30 million egg layers since January alone, severely disrupting egg supplies.
The US Department of Agriculture (USDA) estimates that the national flock of egg layers has dropped by 12% to 292 million birds. The agency’s policy mandates the culling of entire flocks whenever the virus is detected on a farm, exacerbating supply shortages.
“This has nothing to do with anything other than bird flu,” said Emily Metz, President of the American Egg Board. “Our farmers are in the fight of their lives… This is a supply challenge due to bird flu. Nothing else.”
Accusations of Price Gouging and Monopolistic Behavior
Despite the bird flu outbreak, advocacy groups, Democratic lawmakers, and a Federal Trade Commission member are questioning whether major egg producers are exploiting the crisis to inflate prices. Farm Action, a lobbying group for small farmers and consumers, argues that egg production is only down about 4% from last year, yet prices have more than doubled.
“Dominant egg corporations are blaming avian flu for the price hikes… But while the egg supply has fallen only slightly, these companies’ profits have soared,” said Angela Huffman, President of Farm Action. The Justice Department is reviewing a letter from the group calling for an investigation into potential monopolistic practices.
The skepticism is fueled by a 2023 jury ruling that found major egg producers had previously manipulated domestic egg supply to drive up prices in the 2000s. This history raises questions about the industry’s current pricing strategies.
Record Profits Amid Price Surge
Retail egg prices remained below $2 per dozen for years before the current outbreak but have more than doubled since, significantly boosting profits for egg producers. Cal-Maine Foods, the nation’s largest egg producer, reported a staggering $219 million profit in its most recent quarter, compared to just $1.2 million in the quarter before the outbreak began.
Cal-Maine sold 330 million dozens of eggs during the quarter, up from 288 million the year before, benefiting from increased demand and strategic acquisitions. The company attributed the higher prices to “restricted supply levels of shell eggs due to highly pathogenic avian influenza.”
However, Cal-Maine experienced minimal outbreaks on its farms, mainly at a few locations in Kansas and Texas, sparking further questions about the extent to which bird flu is driving record profits.
Rising Production Costs and Inflation Pressures
Economists caution against jumping to conclusions about price gouging, noting that egg producers are facing significant cost increases. The cost of feed, fuel, labor, and biosecurity measures have all surged, contributing to higher production expenses.
The US Bureau of Labor Statistics’ producer price index confirms that production costs are at an all-time high. Additionally, farmers whose flocks are culled receive compensation from the USDA but must cover other costs out of pocket, impacting profitability.
“This isn’t a case where they’re taking the price up to gouge the market. The price is going up through auction at wholesale. And they’re benefiting from higher prices because supplies are tight,” said Jada Thompson, an agricultural economist at the University of Arkansas.
Political Pressure and Calls for Investigation
The price surge has prompted political backlash, with Sen. Elizabeth Warren criticizing President Donald Trump for failing to contain bird flu despite promising to lower food prices. Warren called for immediate relief for working families struggling with high grocery bills.
The Trump administration unveiled a plan this week to combat bird flu, but it remains unclear how quickly the measures will impact egg prices. In the meantime, advocacy groups and lawmakers continue to push for a federal investigation into potential anti-competitive practices.
Bird Flu or Corporate Profiteering?
The debate over record egg prices is far from settled. While the egg industry blames bird flu and rising production costs, critics accuse major producers of leveraging their market power to maximize profits at the expense of consumers.
With the Justice Department reviewing complaints and political pressure mounting, the egg price controversy is likely to intensify. The outcome of the investigation could have significant implications for industry practices and consumer prices.
As the bird flu crisis continues and prices remain high, consumers and policymakers are left grappling with a fundamental question: Are egg producers justified in their pricing, or are they capitalizing on a crisis for profit?
