Soaring egg prices lead senator to call for investigation into price gouging

Sen. Jack Reed on Monday called on the Federal Trade Commission to investigate “potential price gouging and other deceptive practices” as egg prices soared.

The Rhode Island Democrat noted in a letter to agency president Lina Khan that the price of a dozen eggs jumped 138% in December from the same period a year earlier, citing Bureau of Labor Statistics data.

The price of eggs in December rose from $1.79 to $4.25 during the same period in 2021, a 138% increase, according to data from the Bureau of Labor Statistics.

Soaring egg prices have been attributed to the millions of chickens that have been slaughtered to limit the spread of bird flu and to farmers who have to compensate for inflation that is driving up their costs.

America’s largest egg producer, Cal-Maine Foods, was singled out by Reed because it announced last month that its quarterly sales jumped 110% to $801.7 million on record egg prices. , helping it turn in a profit of $198.6 million, up from just $1.1 million a year earlier.

US AGRICULTURAL GROUP CALLS FOR SURVEY ON HIGH EGG PRICES

Senator Jack Reed

Senator Jack Reed speaks on the phone as he leaves a closed lunch meeting with Senate Democrats at the United States Capitol on January 24, 2023. (Drew Angerer/Getty Images/Getty Images)

‚ÄúConsumers are used to seeing some volatility in the egg price market, but the current price spike in favor of the industry warrants careful scrutiny. Independent federal watchdogs should examine the facts and follow the evidence to ensure consumers are treated fairly,” he said in the letter to the FTC. Reed noted that the Department of Agriculture found that the price increase in the sector was “much greater than the declines in production” caused by the bird flu.

Even though around 43 million of the 58 million birds slaughtered over the past year to help control the flu were laying hens, the size of the total flock was only down 5-6% at any time from at its normal size. of about 320 million hens.

A woman buys eggs

Egg shelves are accompanied by a note apologizing to customers for the price hike in San Mateo, California, January 23, 2023. (Tayfun Coskun/Anadolu Agency via Getty Images/Getty Images)

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“At a time when food prices are high and many Americans are struggling to pay for their groceries, we need to look at the industry’s role in perpetuating high prices and hold those responsible accountable for their actions,” wrote Reed.

A farmer-led advocacy group called Farm Action made a similar demand last week. He argued that there “appears to be a collusive scheme between industry executives to turn inflationary conditions and an outbreak of bird flu into an opportunity to extract huge profits.”

Cal-Maine Foods told FOX Business in a statement that it “wants to assure its customers that we are doing everything we can to maximize production and keep store shelves stocked” and that “the national egg market has always been extremely competitive and highly volatile even under normal market circumstances.”

Eggs in a Michigan grocery store

Eggs for sale at a grocery store in Detroit, Michigan, Jan. 18, 2023. (Matthew Hatcher/Bloomberg via Getty Images/Getty Images)

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The prices charged by the Mississippi-based company are determined through negotiations with the grocery chains, club stores and distributors it sells to.

Cal-Maine said its prices averaged $2.71 per dozen over the past quarter. That’s almost double the $1.37 it received a year earlier, but still lower than the prices consumers pay.

The Associated Press contributed to this report.

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