The Justice Department is spearheading an investigation into the sharp rise in egg prices, focusing on possible conspiratorial actions by major egg producers, as the Trump administration contends with the economic ramifications of a severe bird flu outbreak.
Key Facts:
– According to The Wall Street Journal, the investigation will explore whether prominent egg producers have colluded to reduce supply or artificially inflate prices. Sources mentioned in the report remain unnamed.
– The probe is still in its nascent stages and may not result in formal actions against any companies. It remains unclear whether the investigation is aimed at criminal or civil conduct.
– The significant increase in egg prices is largely attributed to an ongoing bird flu outbreak, which has resulted in the culling of approximately 166 million birds since 2022, drastically diminishing the hen population.
– Specific egg producers under scrutiny have not been publicly identified, but major players in the industry, such as Cal-Maine Foods, Rose Acre Farms, and Hillandale Farms, are among the largest producers in the U.S. Notably, Cal-Maine Foods, which operates around 44 million egg-laying hens, is the country’s largest shell egg supplier.
– The Justice Department has not yet responded to requests from Forbes for comments regarding the investigation.
Big Number: $4.95 – This figure represents the average price for a dozen large, Grade A eggs in the U.S. as of January, achieving an unprecedented high and reflecting a near $3 increase since September 2023, as reported by the Bureau of Labor Statistics.
Tangent: The surge in egg prices, which escalated by about $2.80 during President Joe Biden’s last year in office, has been largely connected to the bird flu crisis. Biden’s administration has accused companies across various sectors of engaging in price-gouging and has leveraged antitrust authorities to address what was perceived as inadequate competition contributing to the price hikes. Notably, in a key legal move, Judge Adrienne Nelson blocked a merger between Albertsons and Kroger, agreeing with the Biden administration’s Federal Trade Commission that the merger could lead to excessive dominance in the market.
Key Background: The current bird flu outbreak affecting chicken populations in the U.S. began in 2022 and is projected to continue impacting prices through 2025. The U.S. Department of Agriculture has warned that egg prices are likely to continue experiencing volatile fluctuations, with an expected overall rise of 20.3% this year. In response, former Agriculture Secretary Brooke Rollins introduced a $1 billion initiative to make egg prices manageable again, which includes $500 million for biosecurity measures for poultry producers, $400 million for financial relief for farmers coping with chicken shortages, and $100 million for vaccine and therapeutic development targeting egg-laying hens.
