The Division of Justice underneath President Trump has formally launched an investigation into the staggering surge in egg costs, which is predicted to rise by greater than 40% in 2025.
In keeping with a Wall Avenue Journal report, the DOJ has despatched letters to main egg producers, demanding they protect paperwork associated to their pricing discussions with clients and rivals, in addition to communications with Expana—previously Urner Barry—a enterprise writer that tracks egg costs.
The investigation seems to be centered on figuring out whether or not main egg firms colluded to limit provide and artificially inflate costs whereas raking in record-breaking earnings.
The Biden administration’s financial catastrophe has already led to a crippling improve in meals costs which have burdened American households. When Biden took workplace in January 2021, the common value of a dozen eggs was simply $1.47.
Quick ahead to December 2024, and that very same carton prices $4.15—an almost 200% improve, in keeping with the Federal Reserve of St. Louis.
Now, with some shops pricing a dozen eggs at $10 or greater, the Trump administration is stepping in to find out whether or not company value gouging has worsened the disaster.
The U.S. Division of Agriculture’s newest knowledge signifies that the nationwide common value of eggs has soared to an alarming $6.85.
In keeping with ABC7, one firm that has significantly benefited from this disaster is Cal-Maine Meals, the most important producer of recent eggs in america.
Regardless of widespread claims of provide chain points and chook flu outbreaks, Cal-Maine has seen its inventory value skyrocket by over 50% within the final 12 months as earnings surged.
Farm Motion, a farm advocacy group that has been vocal about company greed, confirmed in a Friday assertion that sources contained in the DOJ say a proper investigation is underway.
Learn the press launch:
Following Farm Motion’s February 2025 letter to the Division of Justice (DOJ) and Federal Commerce Fee (FTC) exposing extreme company earnings, trade consolidation, and certain egg provide restrictions, the DOJ has opened an antitrust investigation into the trade. Farm Motion initially introduced these points to the eye of the enforcement businesses and the general public in a January 2023 letter.
In response to the information of the investigation, Farm Motion issued the next assertion:
“We applaud the Division of Justice’s motion to handle the skyrocketing value of eggs. Each American has felt the monetary ache brought on by the facility of the monopolistic egg trade. Whereas avian flu is actual, it’s no excuse for the value being charged on the grocery retailer for one of many nation’s staples. Whereas Farm Motion’s evaluation demonstrates possible antitrust abuses by the dominant egg-producing firms, the DOJ has the authorized authority to take the deep dive into the trade that’s required to unravel this abuse, and so they have the facility to convey justice on behalf of the American folks.”
Whereas avian flu has been cited as the first driver of skyrocketing egg costs, its precise affect on manufacturing has been minimal. As an alternative, dominant egg producers—significantly Cal-Maine Meals—have leveraged the disaster to boost costs, amass report earnings, and consolidate market energy. The sluggish restoration in flock measurement, regardless of traditionally excessive costs, additional suggests coordinated efforts to limit provide and maintain inflated costs.
Key Pricing Information:
- The wholesale value of Grade-A, Massive, White, Shell Eggs surged from round $0.50–$1.30 per dozen in 2021 to $6.00–$8.00 per dozen immediately.
- Cal-Maine Meals, which controls 20% of the egg market, elevated its gross earnings by 237% between FY21 and FY24. Between FY21 and FY23, their gross earnings shot up by 646%.
- Cal-Maine has made extra in a single quarter than they made in a complete 12 months previous to the 2022 avian flu outbreak.
Proof signifies that by not growing their provide, the 5 dominant egg companies are forcing costs to remain excessive whereas reporting dramatic revenue will increase and stage gross sales. These similar companies are then utilizing their elevated earnings to accumulate their competitors, additional driving market consolidation as an alternative of investing in replenishing or increasing their flocks. Throughout the 2015 avian flu outbreak, the nationwide flock numbers have been recovered inside eight months, but this time round, a restoration has nonetheless not been achieved although it might have been.
Key Manufacturing Information:
- In a month-to-month comparability to 2021, the egg-laying flock was, on common, solely 3.82% smaller in every month of 2022, 3.16% smaller in every month of 2023, and 5.18% smaller in every month of 2024.
- Cal-Maine egg manufacturing has remained steady at roughly 1.1 billion dozen eggs bought yearly from 2021 to 2024.
- Manufacturing of eggs within the U.S. has not dipped beneath per capita consumption of eggs in any 12 months between 2021 and the current.
As well as, one other change from the 2015 epidemic is that entry into the market has change into considerably tougher as a result of extremely concentrated nature of the breeder provide chain. At this time there are simply two personal European firms controlling the breeding of an estimated 90% of the world’s egg-layer hens, and Cal-Maine, one of many largest egg producers, controls its personal breeder flock. This impedes the power of recent rivals to enter the market and improve provide to assist stabilize costs.
