Sen. Jack Reed on Monday known as for the Federal Commerce Fee to open an investigation into “potential value gouging and different misleading practices” as egg costs have spiked.
The Rhode Island Democrat famous in a letter to the company’s chair, Lina Khan, that the worth of a dozen eggs climbed 138% in December in contrast with the identical time a yr prior, citing information from the Bureau of Labor Statistics.
Egg costs in December climbed to $4.25 from $1.79 throughout the identical interval in 2021, a 138% enhance, based on information from the Bureau of Labor Statistics.
The spike in egg costs has been attributed to the thousands and thousands of chickens that had been slaughtered to restrict the unfold of chook flu and farmers having to compensate for inflation driving up their prices.
The biggest U.S. producer of eggs, Cal-Maine Meals, was singled out by Reed as a result of it reported final month that its quarterly gross sales had jumped 110% to $801.7 million on the report egg costs, serving to it generate a $198.6 million revenue, up from simply $1.1 million a yr earlier.
“Shoppers are used to seeing some volatility within the egg pricing market, however the present value spike within the business’s favor warrants cautious scrutiny. Unbiased federal watchdogs ought to have a look at the info and observe the proof to make sure customers are handled pretty,” he stated within the letter to the FTC. Reed famous that the Division of Agriculture had discovered the worth enhance within the sector was “a lot bigger than the decreases in manufacturing” attributable to the avian flu.
Although round 43 million of the 58 million birds slaughtered over the previous yr to assist management the flu have been egg-laying chickens, the dimensions of the entire flock has solely been down 5% to six% at anyone time from its regular measurement of about 320 million hens.
“At a time when meals costs are excessive and lots of Individuals are struggling to afford their groceries, we should study the business’s position in perpetuating excessive costs and maintain these accountable accountable for his or her actions,” Reed wrote.
A farmer-led advocacy group known as Farm Motion made an identical request final week. It argued that there “seems to be a collusive scheme amongst business leaders to show inflationary situations and an avian flu outbreak into a possibility to extract egregious income.”
Cal-Maine Meals informed FOX Enterprise in a press release that it “desires to guarantee its prospects we’re doing the whole lot we will to maximise manufacturing and preserve retailer cabinets stocked” and that the “home egg market has all the time been intensely aggressive and extremely unstable even beneath regular market circumstances.”
The costs the Mississippi-based firm prices are decided by negotiations with the grocery retailer chains, membership shops and distributors it sells to.
Cal-Maine stated its costs averaged $2.71 a dozen in the newest quarter. That’s nearly double the $1.37 it was getting a yr earlier, however nonetheless decrease than the costs customers are paying.
The Related Press contributed to this report.