The U.S. Department of Justice has launched an investigation into the major egg producers amid concerns that industry practices may have contributed to soaring egg prices, a source familiar with the matter told ABC News.
Scrutiny on Price and Supply Practices
The DOJ’s Antitrust Division is examining whether large egg companies have engaged in information-sharing about supply and pricing that could have fueled the dramatic price hikes. While the industry and its trade association attribute the increases to avian flu, investigators are looking into whether collusion played a role in the market shifts.
The probe is still in its early stages, and officials emphasize that it may not necessarily lead to legal action. However, consumer advocacy groups, such as Farm Action, have long called for scrutiny of egg pricing, arguing that major producers are exploiting external crises to justify excessive price hikes.
Political Pressure Mounts
Last month, a group of Democratic lawmakers, including Sen. Elizabeth Warren, D-Mass., urged the administration to take action to curb food price inflation. In a letter to President Donald Trump, they criticized dominant food corporations for profiting from economic hardships faced by working families.
“To make food more affordable, you should look to the dominant food and grocery companies that have made record profits on the backs of working families who have had to pay higher prices,” the letter stated. The lawmakers accused companies of leveraging crises such as the pandemic and avian flu to raise prices beyond what was necessary to cover increased costs.
Egg Prices Soar Amidst Market Volatility
Egg prices have more than doubled since January 2024, with wholesale buyers paying over $8 per dozen at the peak of the surge. However, the latest report from the Department of Agriculture, released Friday, indicated that prices had begun to decline, with the national average wholesale price dropping to $6.85 per dozen.
Despite the dip in wholesale prices, experts warn that consumers may not see immediate relief at grocery stores. Karyn Rispoli, managing editor at Expana, a firm that tracks egg prices, noted that retailers might keep prices high to recover losses from prior disruptions. “Retailers were then holding shelf prices higher to try and recapture some of the margin that they had previously forfeited,” Rispoli explained.
Industry Defends Pricing Practices
Emily Metz, president and CEO of the American Egg Board, which represents egg producers, rejected allegations of price gouging. “Egg farmers are price takers, not price makers,” she stated, attributing the price increases to the economic principles of supply and demand. Metz emphasized that the outbreak of avian flu, combined with sustained high demand, created a “perfect storm” that drove prices upward.
Cal-Maine Foods Faces Increased Scrutiny
As the nation’s largest egg producer, Cal-Maine Foods has come under particular scrutiny. The company, which has acquired multiple brands over the years, has reported soaring profits amid the price surge. According to a recent Securities and Exchange Commission (SEC) filing, Cal-Maine’s gross profits surged 342% in the second quarter of fiscal year 2025 compared to the previous year.
This is not the first time Cal-Maine has faced legal challenges over pricing. In 2023, the company lost a jury trial and was ordered to pay millions in a price-fixing lawsuit. While Cal-Maine Foods has not publicly commented on the latest DOJ investigation, past legal troubles raise questions about industry pricing strategies.
Future Implications
With DOJ investigators now examining the egg industry, the outcome of the probe could have significant implications for both producers and consumers. If evidence of anti-competitive practices is found, it could lead to legal actions aimed at increasing transparency and reducing price manipulation in the industry.
As the investigation unfolds, consumers and small businesses will be watching closely to see whether federal intervention brings any relief to rising grocery costs.
Keep up with the avian flue and egg prices with us on Que Onda Magazine.
