© Reuters. FILE PHOTO: An egg show case is seen practically empty at a Large Meals grocery retailer because the U.S. continues to expertise provide chain disruptions in Washington, U.S., January 9, 2022. REUTERS/Sarah Silbiger/File Photograph
By Leah Douglas
(Reuters) -The Federal Commerce Fee (FTC) ought to look at excessive egg costs for indicators of value gouging from high egg corporations, a farm group stated, as People proceed to pay greater than ever for the family staple.
U.S. regulators, farmers, and business have typically argued lately in regards to the energy of high agriculture corporations to set costs and drive up what shoppers pay for groceries, akin to when the worth of beef skyrocketed in 2021.
The most recent concern is eggs, the worth of which was up 138% in December from a yr prior, to $4.25 a dozen, in accordance with the Bureau of Labor Statistics.
The U.S. Division of Agriculture (USDA) has pointed to a report outbreak of avian flu as a cause for the excessive costs. However the nation’s antitrust regulator also needs to look at record-high income on the high egg firm, stated Farm Motion on Thursday in a letter to FTC chair Lina Khan.
Cal-Maine Meals (NASDAQ:), which controls 20% of the retail egg market, reported quarterly gross sales up 110% and gross income up greater than 600% over the identical quarter within the prior fiscal yr, in accordance with a late December submitting with the Securities and Trade Fee.
The corporate pointed to decreased egg provide nationwide attributable to avian flu driving up costs as a cause for its report gross sales. The corporate has had no constructive avian flu checks on any of its farms.
U.S. egg manufacturing was about 5% decrease in October in comparison with final yr, and egg inventories had been down 29% in December in comparison with the start of the yr, the newest USDA information reveals – a big drop, however one that won’t clarify record-high costs, stated Basel Musharbash, an legal professional with Farm Motion.
“We wish the FTC to dig in and see if shoppers are being value gouged,” Musharbash stated.
The FTC declined to remark.
In an announcement, Cal-Maine stated that greater manufacturing prices, together with avian flu, had been contributing to greater costs.
The American Egg Board, an egg advertising and marketing group, stated in an announcement that egg costs replicate a wide range of elements and that wholesale egg costs are starting to fall.
Practically 58 million chickens and turkeys have been killed by avian flu or to regulate the unfold of the virus because the starting of 2022, largely in March and April, in accordance with USDA. The earlier largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine shares have fallen in latest weeks after climbing virtually 50% final yr.