Dive Brief:
- In a tweet earlier this week, Sen. Bernie Sanders renewed his call to “break up Big Ag” after sales for the country’s largest egg producer Cal-Maine surged 718% in the first quarter of the year.
- Cal-Maine president and CEO Sherman Miller said in a statement that the company’s profits — including net sales of nearly $1 billion — were the result of last year’s highly pathogenic avian influenza (HPAI) outbreak, which reduced the number of egg-laying hens at a time of robust demand. Sanders accused the protein producer of using the virus as a way to artificially inflate prices after it reported zero cases of avian flu in its supply chain.
- As egg prices jumped 55% over the past year, according to the most recent Consumer Price Index from the Bureau of Labor Statistics, the truth behind the price increases and the impact of bird flu continues to be debated.
Dive Insight:
Ever since the skyrocketing prices of eggs and images of empty shelves began dominating the media in late 2022, critics have charged that the largest producers are exploiting the bird flu crisis to enrich themselves. Cal-Maine’s astronomical profits in the last quarter — which followed the 110% increase in sales it saw in the prior quarter — has added fuel to the fire.
In the press release accompanying the egg giant’s earnings report, CEO Miller said the prices are the result of a “dynamic market environment,” and that it sets egg prices based on market quotes from Urner Barry. Miller added that as of March 28, there have been zero positive tests for HPAI at any facility operated by Cal-Maine.
“We are a producer and distributor and do not sell eggs directly to consumers,” Miller said. “As always, we are focused on the long-term, working within the proven operating model that has served us well throughout the various cycles that characterize our industry.”
Roughly 59 million birds have been infected with HPAI since early 2022, the CDC said.
In January, Sen. Jack Reed, a Democrat from Rhode Island, wrote a letter to the Federal Trade Commission asking the government agency to ensure consumers are not being price gouged by the big egg companies. He pointed to USDA Economic Research Service data findings that said smaller producers have not raised prices the same amount.
“USDA also observed little effort among the largest egg producers to increase production to moderate record prices,” Reed said in the letter.
Farm Action, an NGO made up of farmers, said in a January letter to the FTC the impact of HPAI did not provide the basis for the striking increase in prices. The group said the increase in egg prices is a “collusive scheme” led by Cal-Maine, which is a bellwether for the rest of the industry as it controls roughly 20% of the egg market.
There are some signs the volatility surrounding the protein are beginning to cool. According to the most recent Consumer Price Index from the Bureau of Labor Statistics, egg prices decreased 6.7% in the last month. Kevin Bergquist, sector manager for Wells Fargo’s Agri-Food Institute, told Food Dive last week that the market could be finding a balance ahead of the Easter holiday, despite lingering unknowns about the future of the bird flu.
