Soaring egg prices prompt demands for price-gouging probe

Soaring egg prices prompt demands for price-gouging probe

OMAHA, Neb. (AP) — With egg prices greater than doubling up to now 12 months, calls are coming for an investigation into doable worth gouging.

U.S. Sen. Jack Reed sent a letter Tuesday asking for the Federal Trade Commission to research whether or not egg prices have been improperly manipulated by producers. A farmer-led advocacy group known as Farm Action made a similar request final week arguing that there “seems to be a collusive scheme amongst trade leaders to show inflationary circumstances and an avian flu outbreak into a possibility to extract egregious income.”

The spike in egg prices has been attributed to the tens of millions of chickens that had been slaughtered to restrict the unfold of chicken flu and farmers having to compensate for inflation driving up their prices.

But though roughly 43 million of the 58 million birds slaughtered over the previous 12 months to assist management chicken flu have been egg-laying chickens, the dimensions of the full flock has solely been down 5% to six% at anyone time from its regular dimension of about 320 million hens.

The national average retail price of a dozen eggs hit $4.25 in December, up from $1.79 a 12 months earlier, in response to the newest authorities knowledge.

“At a time when meals prices are excessive and lots of Americans are struggling to afford their groceries, we should look at the trade’s position in perpetuating excessive prices and maintain these accountable accountable for their actions,” Reed, a Rhode Island Democrat, mentioned in his letter to the FTC.

But commerce teams say egg prices are largely decided by commodity markets, and specialists say the chicken flu outbreak — mixed with the skyrocketing value of gas, feed, labor and packaging and continued sturdy demand for eggs — is the actual wrongdoer for the value will increase.

“Current egg prices replicate many elements, most of that are outdoors the management of an egg farmer,” mentioned Emily Metz, president and CEO of the American Egg Board commerce group.

Purdue University agricultural economist Jayson Lusk mentioned “in my opinion, the fundamental economics of the scenario properly clarify the value rise.” He mentioned small reductions in egg provide may end up in giant worth will increase as a result of shopper demand for eggs doesn’t waiver a lot.

The FTC didn’t instantly reply Tuesday to questions concerning the egg price-gouging issues, however the company doesn’t typically touch upon outdoors requests for investigations.

The largest U.S. producer of eggs, Cal-Maine Foods, was singled out by each Reed and the Farm Action group as a result of it reported final month that its quarterly gross sales had jumped 110% to $801.7 million on the report egg prices, serving to it generate a $198.6 million revenue. up from simply $1.1 million a 12 months earlier.

The Ridgeland, Mississippi-based firm mentioned it “needs to guarantee its clients we’re doing all the pieces we will to maximise manufacturing and maintain retailer cabinets stocked” and the “home egg market has all the time been intensely aggressive and extremely risky even below regular market circumstances.”

The prices Cal-Maine prices its clients are decided by negotiations with the grocery retailer chains, membership shops and distributors it sells to. Cal-Maine mentioned its prices averaged $2.71 a dozen in the latest quarter. That’s nearly double the $1.37 it was getting a 12 months earlier, however nonetheless a lot decrease than the prices customers are paying.