03-04-2025
The reason egg prices are so high in the US — and it's not just bird flu
America's egg shortage is being exacerbated by a 'cartel' of suppliers inflating their prices, industry figures have claimed.
Egg prices soared as millions of birds were culled following the biggest avian flu outbreak in a decade.
Prices spiked to a record $8.17 per dozen in early March, and although they have since dropped to $4.15, costs remain significantly higher than previous years.
'We believe it's essentially an egg cartel that is controlling the egg markets at this point,' Sarah Carden, of the campaign group Farm Action, told The Telegraph.
'Dominant corporations have used this opportunity of avian flu to really increase their prices.'
Ms Carden said that the gross profits of Cal-Maine Foods, the US' largest egg company, which is estimated to control around a fifth of the market, had ballooned in recent years.
'They're reporting regularly at this point, gross profits in a single quarter that exceed what they used to report in annual gross profits, pre-avian flu,' she said.
'What we would expect to see in a healthy functioning market where we've got supply, demand economics regulating this is some increase in prices… but we wouldn't see these huge jumps in gross profits on the producers' part.'
The justice department in March launched a probe to establish whether egg companies have colluded to raise their prices or artificially restrain their hen flocks.
The latest financial declarations from Cal-Maine show gross profits of some $356 million in the 13 weeks to Nov 30.
In the 13 weeks to Nov 27 2021, before the outbreak of avian flu in February 2022, gross profits were under $44 million.
A report from Food and Water Watch, another campaign group, claims that the company did not experience any avian flu outbreaks in its flocks throughout the 2023 fiscal year, yet its eggs cost 2.8 times more compared to 2021.
Cal-Maine Foods has been approached for comment.
Ms Carden suggested that egg companies may have banded together to artificially restrict the size of their hen flocks, suggesting they have fewer eggs, allowing them to charge higher prices.
However, representatives for egg producers have previously claimed that hen populations were taking longer to recover because many young birds had been killed by the flu.
Company ordered to pay $17.7m over conspiracy
The notion of an egg cartel formed to squeeze money out of hard-pressed Americans already reeling from years of inflation might seem outlandish.
But in a court case two years ago, the country's biggest egg producers were ordered to pay $17.7 million – later tripled to more than $53 million under federal law – over a conspiracy between 2004 and 2008 to limit supplies and push up profits.
Many of the companies, which included Cal-Maine, protested they had done nothing wrong and publicly disagreed with the verdict.
'Eggs are such an important staple in the diet, and, I think that consumers, because of that… have demonstrated a certain ability to absorb price hikes,' she said.
'I think this has been a good indicator of just how high they'll go. When you start approaching $1 an egg, it really seems to be getting people's attention.'
It's rare for Donald Trump, the US president, to appear in front of the media without talking about eggs, alternately blaming his predecessor, Joe Biden, for cost rises and taking credit for the fall in prices in recent days.
Last month, the agriculture department announced that it would spend $1 billion to combat avian flu and extend financial relief to farmers in an effort to cut egg prices.
In March the justice department launched its investigation into the egg giants.
According to the Wall Street Journal, the companies have been instructed to preserve documents related to their pricing conversations with competitors.
They have also been told to keep hold of communications with Urner Barry, which sets the benchmark for daily egg prices by using data from across the supply chain. Critics say this acts as a 'feedback loop' for producers, pushing prices ever higher.
An Urner Barry spokesman said: 'We are one source of information for buyers and sellers, promoting transparency in the market by collating accurate historical transaction data.
'The egg business has no 'single commercial price discovery system', nor is there an 'industry-wide pricing system'. Buyers and sellers are always free to transact at different prices.
'Different contracts are agreed between different buyers and sellers using different formulas, including different inputs such as grain costs or the cost of production.
'It is impossible to see how any market could be made freer or more efficient by reducing the access of participants to relevant factual data.'
