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Following an exorbitant rise in egg prices in the past few months, a United States farm group has called for a federal investigation. The Farm Action farm-group has written a letter to FTC Chairman Lina Khan, urging the nation's antitrust regulator to investigate record-high profits at egg companies.
As per reports from the Bureau of Labor Statistics, Americans have been paying as much as four to five times the price of the breakfast staple for the last few months. In the month of December, the price of eggs had skyrocketed by a massive 138 percent.
In a six-page letter addressed to the FTC Chairman, the Farm Action group has addressed the concerns of customers who are forced to shell out massive amounts for eggs while companies continue to stack on profits far surpassing the mark of 100 percent. The letter from the farm group suggests that a few agricultural companies may be scheming behind the scenes to fan up the prices for the breakfast staple.
The letter calls out some of the top agricultural companies dealing in eggs, with a statement indicating that the companies are trying to use inflationary conditions and avian flu as an excuse to create shockingly high profits.
“The real culprit behind this 138 percent hike in the price of a carton of eggs appears to be a collusive scheme among industry leaders to turn inflationary conditions and an avian flu outbreak into an opportunity to extract egregious profits,” the letter read.
Will the Farm Action letter help ease egg prices in the country?
There's no denying the fact that inflation has caused serious price disruptions and economic issues across the world. Though worldwide inflation seems to be falling back under comfortable values, prices for groceries, including eggs, are still a serious concern for Americans. Currently, Americans are paying as much as 138 percent more than what they were paying for eggs during 2016 or 2018.
As per the United States Department of Agriculture (USDA), a record outbreak of avian flu has been the reason for the high egg prices in the country. The shortage of egg supply has led to the rise in prices, and a carton of egg from a retail grocery store currently costs more than $6 for a 12-count carton of white or brown eggs. The letter by Farm Action farm-group urges the FTC to pay attention to how these top egg companies continue to gain record-high profits even with the said 'shortage of egg supply', but it is yet to be seen whether the letter can help bring egg prices back down.
Cal-Maine Foods (CALM.O), one of the top egg companies in the United States, which has a control on over 20% of the retail egg market, has reported quarterly sales up 110% and gross profits of more than 600% over the same quarter in the prior fiscal year. The data comes from the company's late December filing with the Securities and Exchange Commission. It is to be noted that the company has blamed the decreased egg supply nationwide due to the avian flu as the driving factor behind its record sales, while the company has recorded no positive avian flu tests on any of its farms across the country.
Basel Musharbash, an attorney with Farm Action, agrees that the egg production in the country was 5% lower in October in comparison to last year's records, and egg inventories were down by 29% in December in comparison to the beginning of 2022. He said that the latest data from the USDA showed a significant drop in the numbers, but that was not enough to explain the record-high egg prices.
"We want the FTC to dig in and see if consumers are being price gouged," Musharbash said on behalf of Farm Action.
The FTC has not yet commented on the matter, but we may soon get to hear from the antitrust regulator. As of now, it is not clear whether this step can really help ease the exorbitant rise in egg prices in the country, but it sure leaves a small sliver of hope for customers.
