The egg prices are too damn high. And perhaps there’s something more than just a deadly bird flu to blame.
High egg prices were even addressed by Rep. Ashley Hinson at a recent town hall in Grundy Center, who brought it up unprompted when talking about her two sons, ages 10 and 11, who she said were “about to eat me out of house and home.”
“My son had five eggs last Sunday, and I about had an attack, ’cause I thought, ‘Oh my gosh, like, he just ate $4 worth of eggs,'” Hinson told the crowd.
Egg prices aren’t quite that high—a dozen Grade A large eggs costs an average of $4.82 across the US as of Feb. 14. But prices for eggs have indeed been on the rise, and have particularly skyrocketed since September, when the average price was $2.90 per dozen.
The bird flu theory
The avian influenza outbreak, which began circulating last year, is certainly a major disrupter of the egg industry.
If the virus is found in a flock of domestic poultry, even in just one bird out of millions, the US Dept. of Agriculture requires the entire flock to be immediately killed “to protect our nation’s flocks and economy.”
Over 58 million wild and domestic birds in 47 states have been killed since last January. That includes 31 commercial flocks in 18 Iowa counties.
But while just eight of Iowa’s 31 mass kills were in the egg industry, they accounted for the vast majority of birds—more than 15.1 million out of 15.9 million were egg-related. Just two of those flocks alone accounted for the killing of more than 5 million egg-laying hens each.
Those huge flocks contribute to making avian influenza a bigger problem than it should be. But that’s not why prices are rising, said rural advocate and State Rep. J.D. Scholten (D-Sioux City).
“This is a classic example of market concentration,” Scholten said. “And consumers are paying the cost.”
The monopoly theory
Market concentration, also known as monopolization, has accelerated in a wide variety of industries in recent decades, with little pushback from federal agencies designed to prevent it.
Nowhere is that more pronounced than the agriculture industry: Just four large corporations control 85% of beef packing, 66% of pork and 54% of poultry, leading to prices for meat going up while farmers make less.
While eggs in particular are less consolidated, one company, Cal-Maine, still controls 20% of the egg market alone, or around 47 million egg-laying hens.
“In ag, the culture is, ‘get big or get out,'” Scholten said.
And while the egg companies claim avian flu is the reason for drastically higher prices, “its actual impact on the egg supply was minimal,” said farmer advocacy organization Farm Action in a letter to Federal Trade Commission Chair Lina Khan this week.
Data showed most of the avian flu kills—which were not insignificant, killing 43 million birds—dropped dramatically after June, flock sizes experienced at most a drop of 8% overall, and hens actually overproduced eggs last year, leading to “no substantial decline in 2022 compared to 2021,” Farm Action said.
Inflation played a role: Production and feed costs were 22% higher in 2022 than in 2021, Cal-Maine told investors. Yet the company’s gross profits far surpassed that, increasing tenfold in 2022—from just over $50 million in mid-2022 to more than $535 million by the end of November—the same time as egg prices were rising.
And in the fall of 2022, when egg prices were rising the fastest, Cal-Maine reported no positive avian flu tests on any of its farms.
“Cal-Maine’s willingness to increase its prices—and profit margins—to such unprecedented levels suggests foul play,” Farm Action wrote. “Contrary to industry narratives, the increase in the price of eggs has not been an ‘Act of God’—it has been simple profiteering.”
The Khan-led FTC could and might investigate Cal-Maine for anti-trust violations, as Farm Action and at least one US senator is advocating.
But other agencies need to come on board as well, including investigations by the US Dept. of Agriculture and prosecutions if needed by the Department of Justice, Scholten argued.
“The antitrust portion of this is, on many, many levels, the first step in solving this,” he said.
He also argued for federal legislation to “de-incentivize” companies merging into monopolies, suggesting fewer subsidies or tax breaks on larger industry players.
More and smaller companies would mean smaller flock sizes, increasing animal welfare and competition in the marketplace, and providing more opportunities for small farmers.
“When we have just a few corporations dictating everything, the farmers get screwed, the workers get screwed, and the consumers get screwed, while they rake in record profits,” Scholten said.
by Amie Rivers
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3 Comments on "What Really Drove Up Egg Prices"
We should promote and incentivize home food production by giving home owners a deduction for producing food with small home farms and animal production like eggs. Small farm businesses should get the majority of fed credit and deductions and the bigger the company the less tax benefits or actual penalties for going to big.
I just want to quickly point out that while “wild birds” seem to get the blame for bird flu in many Iowa media stories, the current extra-virulent strain of bird flu developed in Asian commercial poultry flocks and spread to many nations from there. As is true for so many planetary problems, human activity is to blame.
The rising cost of food and other items aka “Bidenflation” hurts those families who are living paycheck to paycheck. This Democrat remembers when Teddy Kennedy and Jerry Brown challenged a failed Democratic president(Carter) back in 1980. We need Democrats who have the moral fortitude and backbone to challenge Biden in the Iowa Caucus in 2024.