As egg prices continue to climb, one U.S. egg producer reports an 82% increase in revenues. What’s going on?
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Revenue increases at Cal-Maine has some lawmakers
and consumer advocates calling for an investigation. |
Bird flu may not be the only reason U.S. egg prices are climbing. The massive profit increases at Cal-Maine, the country’s biggest egg producer, suggest another reason for soaring egg costs. The company’s snowballing revenue has some lawmakers and consumer advocates asking for an investigation into egg pricing practices.
“There is at least one winner in the current shortage,” report Danielle Kaye and Julie Creswell of The New York Times. “Cal-Maine Foods, which controls about a fifth of the egg market reported that its revenues jumped to $954 million in the quarter that ended in late November from $523 million from the prior year — an increase of 82%.”
Cal-Maine has quietly consolidated portions of the egg industry, which has helped increase its profits. “Cal-Maine has acquired more than two dozen companies since 1989. It and four other large producers control roughly half of the egg market in the United States,” Kaye and Creswell explain.
“The company’s net income surged more than 500% to $218 million, from year-earlier levels, thanks to higher prices, the lower cost of feed and acquisitions of other operators.”Meanwhile, U.S. consumers continue to pay more and more for a dozen eggs. “The concentration of egg production in fewer hands is raising concerns, stoked by previous findings,” the Times reports. “Two years ago, the largest producers were found liable for inflating prices in the 2000s. Now, some lawmakers are calling for federal regulators to investigate the industry.”Alvaro M. Bedoya, a Democratic commissioner on the Federal Trade Commission, told the Times, “I don’t know what’s happening in the egg industry, but it sure as hell seems we should be looking into it and see if there’s anticompetitive conduct that is hurting consumers.” Kaye and Creswell add, “Similar pleas from advocacy groups and lawmakers were made to the F.T.C. under the Biden administration.”
Read about the egg price-fixing case filed in 2011, which went to a jury, here.
