Soaring Egg Prices Raise Demands for Price Gouging Investigation | Arkansas Business News


Failed to submit article.

OMAHA, Neb. (AP) — With egg prices more than doubling in the last year, there are calls for an investigation into possible price gouging.

US Senator Jack Reed sent a letter on Tuesday asking the Federal Trade Commission to investigate whether egg prices have been improperly manipulated by producers. A farmer advocacy group called Farm Action made a similar request last week, arguing that “there appears to be a collusive scheme among industry leaders to turn inflationary conditions and an avian flu outbreak into a blatant profit opportunity.”

The surge in egg prices has been attributed to the millions of chickens that were slaughtered to limit the spread of bird flu and farmers forced to make up for inflation driving up their costs.

But even though some 43 million of the 58 million birds killed last year to fight avian influenza were laying chicks, the size of the entire flock was only 5-6% smaller than normal. about 320 million chickens.

The national average retail price for a dozen eggs reached $4.25 in December, up from $1.79 a year earlier, according to the latest government data.

“At a time when food prices are high and many Americans can barely afford groceries, we must examine the industry’s role in keeping prices high and hold those responsible accountable for their actions,” the Rhode Island Democrat said in his letter. Reid. at the FTC.

But trade groups say egg prices are largely driven by commodity markets, and experts say the avian flu outbreak, combined with skyrocketing fuel, feed, labor and packaging costs and continued high demand for eggs, is the real reason for the price hike. .

“Current egg prices reflect many factors, most of which are beyond the control of the egg manufacturer,” said Emily Metz, president and CEO of the American Egg Board trading group.

Jason Lusk, an agricultural economist at Purdue University, said: “I think the underlying economics of the situation is a good explanation for the rise in prices.” He said that a slight reduction in the supply of eggs could lead to a significant increase in prices because consumer demand for eggs does not fluctuate much.

The FTC did not immediately respond to questions about egg price gouging Tuesday, but the agency does not typically comment on external requests for investigations.

The largest U.S. egg maker, Cal-Maine Foods, was highlighted by both Reed and Farm Action Group as it reported last month that its quarterly sales jumped 110% to $801.7 million at record egg prices. , which helped him earn $198.6. million profit. compared to $1.1 million a year earlier.

The Ridgeland, Mississippi-based company said it “wants to reassure its customers that we are doing everything we can to maximize production and maintain inventory on store shelves” and that “the domestic egg market has always been highly competitive and highly volatile even under normal market conditions. . ”

The prices Cal-Maine charges its customers are determined through negotiation with grocery chains, club stores and distributors to whom it sells. Cal-Maine said its prices averaged $2.71 a dozen in the most recent quarter. That’s nearly double the $1.37 he was getting a year earlier, but still way below the prices consumers pay.


All content © Copyright 2023 Associated Press. All rights reserved.

Content Source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button