The Justice Department (DOJ) is investigating accusations that large producers conspired to raise egg prices and keep them high, according to news reports.
The news broke Friday, when The Wall Street Journal reported “that antitrust enforcers are investigating whether large producers have engaged in anticompetitive conduct.”
The DOJ sent a letter to some egg companies asking them to preserve documents about their pricing conversations with customers and competitors. Officials also asked egg companies to preserve communications with Expana, which tracks wholesale egg-price information, WSJ reported.
Eggs have more than tripled in price since 2020. The average cost for a dozen eggs in 2020 was $1.50, according to data cited by WSJ based on Labor Department information. Over the next three years it rose exponentially, hitting just under $5 in 2023, before dipping down to about $2 for a short time, only to climb back up to its current highest point.
More Than Bird Flu
The nonprofit Farm Action applauded news of the investigation and pointed to long held suspicions that there was more to high egg prices than the most commonly cited culprit, bird flu:
While avian flu is real, it is no excuse for the price being charged at the grocery store for one of the country’s staples. While Farm Action’s analysis demonstrates likely antitrust abuses by the dominant egg-producing corporations, the DOJ has the legal authority to take the deep dive into the industry that is required to get to the bottom of this abuse, and they have the power to bring justice on behalf of the American people.
Farm Action sent the Federal Trade Commission a letter back in January 2023, urging an investigation into the egg industry and prosecution of any violations of antitrust laws. The nonprofit made the case that the 2022 avian flu outbreak should not have resulted in such steep price increases. It said the “the price increase” observed in the egg sector was “much larger than the decreases in production,” and concluded that “no other supply chain disruption or increase in input costs justifies the dominant egg producers’ more than three-fold price hike.” Farm Action noted that for the 26-week period ending on November 26, 2022, Cal-Maine reported a tenfold year-over-year increase in profits. Its gross profits increased “in lockstep” with rising egg prices through every quarter of the year.
Irrational Reaction
While good old-fashioned collusion is the primary suspect in the latest reports, there’s no doubt the government’s response to the bird flu has indeed reduced egg supply. More than 150 million egg-laying chickens and turkeys have been culled since 2022 to combat and prevent an outbreak of bird flu. Egg producers have had trouble repopulating their flocks because even young birds have been killed by the bird flu, according to Emily Metz, chief executive of the American Egg Board.
Some livestock experts have criticized the measures as overzealous, inept, and, worst of all, unnecessary. Homesteading and agricultural expert Joel Salatin has pointed out the irrational approach of culling entire flocks without even preserving the survivors:
The thing that gets me about avian influenza is the response to it. In any flock that gets avian influenza, there are always survivors — many times, more survivors than not. You would think that if the people in charge were actually thinking, that they would say, “We have a flock here of chickens, some got it, some didn’t. Why don’t we save the ones that didn’t, we’ll take their genetics and breed them — and maybe we’ll actually breed in more robust immune systems.” … [But] no. If you have 10,000 birds in a flock, one bird’s got avian influenza, immediately, by government decree, all of them must be exterminated. All of them. … The whole program about avian influenza is about extermination. That is never a way to actually get ahead of disease.
More Government Interference
Before it began looking into collusion among egg producers, the government announced it was taking steps to lower prices. Secretary of Agriculture Brooke Rollins laid out a five-pronged strategy at the end of February.
The first step includes allocating $500 million to help poultry producers implement “gold-standard” biosecurity measures. This will result in free biosecurity audits for producers who’ve been affected by bird flu. The U.S. Department of Agriculture (USDA) will also send out trained epidemiologists to offer advice to producers. Another element of this step will include implementing sanitary measures such as hosing down the vehicles of those working in egg facilities, ensuring that workers wear protective gear, and ensuring workers shower before entering and leaving facilities.
The second step includes doling out up to $400 million to farmers affected by the bird flu so they can recover faster.
Rollins also said the USDA will look into possibly using vaccines and therapeutics to prevent bird flu outbreaks. As of now, although the agency is looking into vaccines for poultry, it hasn’t authorized them.
This part of the plan drew objections from the head of another government agency. Health and Human Services Secretary Robert F. Kennedy Jr. said all three agencies he oversees oppose this step:
There’s no indication that those vaccines actually provide sterilizing immunity and all three of my health agencies, NIH [National Institutes of Health], CDC [Centers for Disease Control and Prevention], and FDA [Food and Drug Administration], the acting heads of those agencies have all recommended against the use of the bird flu vaccine.
Kennedy said opposition is based on concerns that vaccinating poultry would turn the birds into “mutant factories,” and result in “worrying genetic changes to the virus.” Others have gone a step further and said that vaccinating poultry can cause mutations that lead to human infection. The USDA, for its part, says it will tread very carefully in this area “to ensure the public health and safety of any such approaches include considerations of tradeoffs between public health and infectious disease strategy.”
Rolling Back Regulations?
A fourth step the USDA is considering, according to Rollins, is removing needless regulations that get in the way of producers doing what they do best. She pointed to one particular state as an example of what not to do:
This will include examining the best way to protect farmers from overly prescriptive state laws, such as California’s Proposition 12, which established minimum space requirements for egg-laying hens, increasing production costs and contributing to the Golden State’s average price of $9.68 a dozen.
The Trump administration is also considering temporarily importing eggs to beef up supply. However, anticipating pushback, it said it will be careful in ensuring quality standards are met.
Backyard Chickens
And lastly, the USDA wants to make it easier for families to raise chickens. Rollins did not provide a lot of details for this part of the plan, but the folks at The Washington Post opinion section saw this as the easiest portion of the plan to poke fun at. “Frustrated with egg prices? Just raise your own chickens!” opinion contributor Catherine Rampell crowed Sunday.
While it’s obviously true that not everyone can and will want to raise chickens, it’s also true that many would were it not for local regulations. At least half of Americans live in the suburbs. A majority of them have enough yard to keep a few chickens. What’s silly is not the suggestion that more people should keep chickens, but that anyone would deride something with no real downside. In addition to having access to eggs in your own backyard, keeping chickens makes one just a tad more self-sufficient. Covid mania illustrated some of the vulnerabilities of modern-day international supply chains. The outbreak of a legitimately deadly disease could disrupt the food supply in catastrophic proportions. This realization has served as a major catalyst for the rise of homesteading among Americans.
Another reason for people to become more self-sufficient is the existing threat to food security. Globalists have attacked beef farming and suggested the elimination of meat. Carbon-capture pipeline schemes have threatened the property rights of America’s most productive farmers. And across Europe, globalists have worked hard restrict the use of fertilizer and reduce available farmland.
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