Democratic Rhode Island Sen. Jack Reed is calling for an investigation into whether price gouging is contributing to surging egg prices.
Sen. Reed sent a letter to Federal Trade Commission (FTC) Chair Lina Khan urging the commission to “open an investigation into potential price gouging and other deceptive practices by the country’s largest egg companies” which are potentially contributing to higher egg prices.
Egg prices are up & Big Egg companies are raking in historically high profit margins. I’m asking @FTC to open an investigation into the country’s largest egg companies and get to the bottom of this price jump.https://t.co/Pc2XyUUDBH
— Senator Jack Reed (@SenJackReed) January 24, 2023
“Consumers are used to seeing some volatility in the egg pricing market, but the current price spike in the industry’s favor warrants careful scrutiny. Independent federal watchdogs should look at the facts and follow the evidence to ensure consumers are treated fairly,” Sen. Reed said in a press release, Axios reported.
Data from the Bureau of Labor Statistics (BLS) shows egg prices were up 60% in December 2022 compared to December 2021, Axios reported. A dozen eggs cost $4.25 in December, an increase of 66 cents from November 2022. (RELATED: Inflation Used To Squeeze The Middle Class. Now It’s Hitting The Poor The Hardest)
The egg industry has attributed the high prices to an avian flu outbreak that dropped U.S. egg inventories by 29% in the final week of December 2022, according to the Department of Agriculture (USDA).
Over 57 million birds in commercial and backyard flocks have been affected by the outbreak since it was first detected in February 2022, according to USDA data. The losses have decreased the egg supply by an average of 7.5% per month, the New York Times reported.
Sen. Reed believes the egg price increase has been much greater than the decrease in production caused by the Avian flu outbreak, the letter says. He cited the record profits from Cal-Maine Foods, America’s largest egg producer, as possible evidence of price gouging. Cal-Maine Foods went from -2.4% to a profit margin of just over 22% from quarter to quarter and reported record profits of $323 million, Reed’s letter notes.
Reed’s letter came after Farm Action, a farmer advocacy group, wrote a letter to Khan alleging large producers are price gouging and colluding in a monopolized industry. The group urged Khan to investigate and prosecute any potential antitrust violations in the egg industry.
Sen. Reed’s office did not immediately respond to a request for comment.