by Jan 19 (Reuters) – The Federal Trade Commission (FTC) should study excessive egg prices for indicators of worth gouging from high egg firms, a farm group mentioned, as Americans proceed to pay greater than ever for the family staple.
U.S. regulators, farmers, and business have usually argued in recent times concerning the energy of high agriculture corporations to set prices and drive up what shoppers pay for groceries, corresponding to when the value of beef skyrocketed in 2021.
The newest concern is eggs, whose worth was up 138% in December from a 12 months prior, to $4.25 a dozen, in keeping with the Bureau of Labor Statistics.
The U.S. Department of Agriculture (USDA) has pointed to a report outbreak of avian flu as a purpose for the excessive prices. But the nation’s antitrust regulator should additionally study record-high income on the high egg firm, mentioned Farm Action on Thursday in a letter to FTC chair Lina Khan.
Cal-Maine Foods (CALM.O), which controls 20% of the retail egg market, reported quarterly gross sales up 110% and gross income up greater than 600% over the identical quarter within the prior fiscal 12 months, in keeping with a late December submitting with the Securities and Exchange Commission.
In the submitting, the corporate pointed to decreased egg provide nationwide attributable to avian flu driving up prices as a purpose for its report gross sales. The firm has had no optimistic avian flu exams on any of its farms.
U.S. egg manufacturing was about 5% decrease in October in comparison with final 12 months, and egg inventories have been down 29% in December in comparison with the start of the 12 months, the newest USDA knowledge exhibits – a major drop, however one that won’t clarify record-high prices, mentioned Basel Musharbash, an lawyer with Farm Action.
“We need the FTC to dig in and see if shoppers are being worth gouged,” Musharbash mentioned.
The FTC declined to remark. Cal-Maine didn’t reply to a request for remark.
The American Egg Board, an egg advertising group, mentioned in a press release that egg prices mirror a wide range of elements and that wholesale egg prices are starting to fall.
Nearly 58 million chickens and turkeys have been killed by avian flu or to manage the unfold of the virus for the reason that starting of 2022, largely in March and April, in keeping with USDA. The earlier largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine shares have fallen in latest weeks after climbing nearly 50% final 12 months.
Reporting by Leah Douglas
Editing by Bill Berkrot
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