Jan 19 (Reuters) – The Federal Trade Commission (FTC) should investigate high egg prices for signs of price gouging by top egg companies, a farm group said, as Americans continue to pay more than ever for the household product.
US regulators, farmers and industry have often clashed in recent years over the power of top agricultural firms to set prices and increase what consumers pay for groceries, such as when the price of beef skyrocketed in 2021[ads1].
The latest concern is eggs, the price of which rose 138% in December from a year earlier, to $4.25 a dozen, according to the Bureau of Labor Statistics.
The US Department of Agriculture (USDA) has pointed to a record outbreak of bird flu as a reason for the high prices. But the nation’s antitrust regulator should also investigate record profits at the top egg company, Farm Action said Thursday in a letter to FTC Chairman Lina Khan.
Cal-Maine Foods ( CALM.O ), which controls 20% of the retail egg market, reported quarterly sales up 110% and gross profit up more than 600% over the same quarter last fiscal year, according to a late December filing with Securities and Exchange Commission.
The company pointed to reduced egg supply across the country due to bird flu driving up prices as a reason for the record sales. The company has not had positive tests for bird flu 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 show — 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.
In a statement, Cal-Maine said higher production costs, along with bird flu, contributed to higher prices.
The American Egg Board, an egg marketing group, said in a statement that egg prices reflect a number of factors and wholesale egg prices are beginning to fall.
Nearly 58 million chickens and turkeys have been killed by bird flu or to control the spread of the virus since the beginning of 2022, mostly in March and April, according to the USDA. The previous largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine stock has fallen in recent weeks after climbing nearly 50% last year.
Reporting by Leah Douglas Editing by Bill Berkrot and Alistair Bell
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