OMAHA, Nebraska — The recent surge in egg prices, hitting a record high of $4.95 per dozen, has sparked a debate over the root cause of the increase. While egg producers attribute the soaring prices to a widespread bird flu outbreak, critics argue that major companies are exploiting their control over the market to enhance their profits at the expense of consumers who are mindful of their budgets.
The escalation in egg prices has prompted advocacy groups, Democratic lawmakers, and even a member of the Federal Trade Commission to call for a governmental inquiry. This appeal coincides with the Trump administration’s unveiled strategy for combating bird flu, though it’s uncertain how this will impact egg prices, a significant inflation factor. Senator Elizabeth Warren highlighted the issue, pointing out that Donald Trump’s promise to lower food costs hasn’t materialized as egg prices continue to rise unchecked.
The primary factor cited by the egg industry and several experts for the price hike is the bird flu. Since the outbreak, over 166 million birds have been culled in efforts to control the virus, with more than 30 million egg-laying hens exterminated just since January. This has severely disrupted the egg supply, aligning with the USDA’s policy of slaughtering entire flocks when the virus appears on a farm. Consequently, the national count of egg layers has dwindled, with an early February USDA estimate indicating a 12% drop to 292 million birds, though the figure has likely worsened with another 11 million killed after that time.
Emily Metz, President of the American Egg Board, reinforces the notion that the current crisis stems solely from the bird flu, dismissing alternative explanations as misinterpretations of the situation. She emphasizes the efforts of farmers who are striving to safeguard their birds amid what she describes as a dire supply challenge.
However, skepticism arises as Farm Action, a group supporting smaller farmers and rural communities, questions such assertions. They note that egg production has only decreased by about 4% from the previous year, while an impressive 7.57 billion eggs were produced last month. Yet, consumers still report difficulty finding eggs in stores, leading some to believe that dominant corporations are artificially inflating prices while their profits skyrocket.
The Justice Department has received a request for an investigation from Farm Action but hasn’t commented on the matter. Historical precedents add to suspicions, such as a jury decision in 2023 that determined major egg producers used strategies in the 2000s to limit domestic egg supply, consequently raising prices.
Data over the years point to a contrast: egg prices generally stayed under $2 per dozen before the current outbreak but have more than doubled since. This surge has significantly boosted egg producers’ profits, even as they contend with increased operational costs. Publicly traded Cal-Maine Foods, a leading supplier accounting for around 20% of U.S. eggs, showcased heightened profits, with figures from the recent quarter showing a $219 million profit, contrasting with just $1.2 million prior to the outbreak. The rise in demand, coupled with minimal outbreaks at their farms, contributed to their success.
On the expenditure side, the record egg prices aren’t definitively indicative of manipulative behavior, as some economists suggest. The temporary profit might fade as farms suffer bird flu hits, requiring up to a year for recovery post-culling. The USDA compensates farmers for each bird culled but doesn’t cover the full spectrum of costs during income shortages.
Additional contributing factors to high egg prices include the soaring costs of feed, fuel, and labor, coupled with increased investment in biosecurity measures by farmers aiming to keep the virus at bay. According to the U.S. Bureau of Labor Statistics’ producer price index, production costs have reached unprecedented levels.
Experts like Brian Earnest of CoBank and Jada Thompson, an agricultural economist from the University of Arkansas, caution that while consumers sense they’re on the losing end of this pricing surge, farmers burdened with depopulating barns face even tougher challenges. The current market dynamics reflect a supply-driven increase, rather than an intentional price gouging effort.
