Egg Prices Soar: Bird Flu or Big Business?

Egg prices have skyrocketed to unprecedented levels, leaving many consumers scratching their heads. The culprit? Bird flu, according to the egg industry. More than 166 million birds have been culled to stop the virus from spreading. This has led to a significant drop in the number of egg-laying hens, causing a supply shortage. The USDA has a policy of killing entire flocks if the virus is detected on a farm. This has resulted in a nationwide decrease of about 12% in egg layers, from 300 million before the outbreak to 292 million. However, this number is likely even lower now, as another 11 million egg layers have been killed since February. Some people are not convinced that bird flu is the only reason for the price hike. Advocacy groups and lawmakers are calling for a government investigation. They suspect that big egg companies might be taking advantage of the situation to boost their profits. Farm Action, a group that advocates for smaller farmers, consumers, and rural communities, points out that egg production has only decreased by about 4% from last year. Despite this, some grocery stores are still seeing empty egg shelves. This has raised questions about the motives of dominant egg corporations. The numbers tell a story. Retail egg prices were below $2 per dozen for years before the outbreak. Now, they have more than doubled. This has led to a significant increase in profits for egg producers, even as they face rising costs. The biggest egg producer, Cal-Maine Foods, saw its profits soar to $219 million in the most recent quarter. This is a dramatic increase from the $1. 2 million profit in the quarter just before the outbreak began. Cal-Maine's president and CEO, Sherman Miller, attributes this to higher market prices due to supply restrictions caused by bird flu outbreaks. But is this the whole story? Some people are not so sure. A jury ruled in 2023 that major egg producers used various means to limit the domestic supply of eggs to increase prices during the 2000s. This has added to the doubts about their motives now. Economists and analysts say that the record egg prices aren't necessarily a sign of something nefarious. Short-term profits might only last until farms get hit by the virus. Once a flock is slaughtered, it can take as long as a year to clean a farm and raise new birds to egg-laying age. The USDA pays farmers for every bird killed, but it doesn't cover all the costs for farmers as they go without income. Inflation in the costs of feed, fuel, and labor have contributed to rising egg prices. Farmers have been investing in biosecurity measures to help keep the virus away. So, production costs are also at an all-time high, according to the U. S. Bureau of Labor Statistics' producer price index. This isn't a case where they're taking the price up to gouge the market. It is the price is going up through auction at wholesale. And they're benefiting from higher prices because supplies are tight.