Saturday, February 4, 2023

USA: Ask to investigate the sharp rise in the price of eggs

Omaha, Nebraska, N.E. ( Associated Press) — After egg prices soared more than 100% in the past year in the United States, authorities are beginning to receive requests to launch an investigation into possible price manipulation.

Democratic US Sen. Jack Reid sent a letter Tuesday asking the Federal Trade Commission to investigate whether producers mismanaged egg prices. Farm Action, a farmer-led advocacy group, filed a similar request last week, alleging “a nexus between industry leaders to convert the inflationary situation and bird flu outbreak into an opportunity for huge profits.” There appears to be collusion.”

The rise in egg prices is attributed to the millions of chickens that were culled to prevent the spread of bird flu as farmers were forced to offset rising costs due to inflation.

But even though about 43 million of the 58 million birds killed last year to help control bird flu are laying hens, the overall flock size dropped only 5-6% from the normal size of around 320 million copies. Is.

The national average retail price for a dozen eggs reached $4.25 in December, compared to $1.79 a year earlier.

“At a time when food prices are high and many Americans are struggling to afford food, we must review the role of industry in maintaining high prices and hold those responsible,” Reed said in his letter to the commission. should.”

But trade groups say commodity markets largely determine egg prices, and experts say the bird flu outbreak — along with sharp increases in the cost of gasoline, feed, labor and packaging — has contributed to higher prices of eggs. Demand – is the real culprit behind. price hike.

“Current egg prices are a reflection of many factors, many of which are beyond the egg producer’s control,” said Emily Metz, president and CEO of the American Egg Board trade group.

“From my perspective, the fundamentals of economics explain price increases very well,” said Jason Lusk, an agricultural economist at Purdue University. He said that even a small reduction in the supply of eggs can lead to a big price increase as consumer demand for eggs does not vary much.

The Federal Trade Commission did not respond to questions Tuesday about concerns about possible egg price manipulation, but the agency generally does not comment on outside requests for investigations.

Reed and Farm Action both pointed to Cal-Maine Foods, the top US egg producer, as it reported last month that its quarterly sales rose 110% to $801.7 million due to record egg prices, leading them to helped gross $198.6 million. Last year, his earnings were just $1.1 million.

The Ridgeland, Mississippi-based company said it “wants to assure our consumers that we are making every effort to maximize production and keep supplies on store shelves,” adding that “the domestic egg market has always been highly competitive.” has been competitive and highly volatile, even under normal market conditions.

The price that Cal-Maine charges its consumers is determined through negotiations with the supermarket chains, wholesale stores and distributors to whom it sells its product. Cal-Maine said the average price for a dozen eggs in the most recent quarter was $2.71. This figure is nearly double the $1.37 charged a year ago, but is well below the prices consumers pay.

Nation World News Desk
Nation World News Desk
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