W hen the holiday-induced baking frenzy passed and demand for snickerdoodles slowed, many thought egg prices would fall. The cost of a dozen had surge

The price of eggs in America cannot be explained by inflation alone

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2023-03-17 07:00:04

W hen the holiday-induced baking frenzy passed and demand for snickerdoodles slowed, many thought egg prices would fall. The cost of a dozen had surged by more than that of any other supermarket item, from $1.79 to $4.25 in the year to December 2022. Could they get any pricier? Indeed they could. When January came to a close, Joe Biden told America that food inflation was cooling. But egg prices had risen by another 13.5%.

The Department of Agriculture blamed last year’s price spike on an avian-flu outbreak that killed 43m of America’s egg-laying birds. Industry lobbyists say that the rising costs of feed, fuel and labour further pushed up prices.

Such problems tend to beget shortages, but Cal-Maine Foods, which has 20% of the market and is the country’s biggest egg producer, sold more eggs in 2022 than in 2021 (the company sells about 12bn eggs a year). Though flocks in the industry overall were a tad smaller, the Stakhanovite hens laid more. Ultimately inflation and flu brought a boon to Big Egg. While the S&P 500 fell by 9% last year, Cal-Maine’s shares rose by 17%. The firm generated $800m in sales in the final quarter of 2022, a 110% increase on the same period the previous year; gross profits increased seven-fold.

Farm Action, an advocacy group which supports small farmers (and hates genetically modified crops), has accused Cal-Maine and two other big egg companies of price gouging, arguing that the virus, supply-chain disruptions and inflation together do not justify the price rises. The firms, Farm Aid argued in a letter to the Federal Trade Commission, cite these trends to hide unjustified price hikes. Together the three account for close to 40% of eggs sold in America, an impressive (or worrying) amount of market power.