Why the egg is at the center of a controversy in the United States
In the midst of inflation that worries vast sectors of American society, the White House began to receive complaints for particularly investigate the increases that the egg hada food that rose 100% in the last year. A group of farmers and a Democratic senator talked about “price gouging”.
the democrat senator Jack Reed sent a letter on Tuesday to the Federal Trade Commission to investigate whether the producers improperly manipulated egg prices. Farm Action, a group of farmers, submitted a similar request last week. “There appears to be a collusive system among industry leaders to turn inflationary conditions and an outbreak of bird flu into an opportunity for huge profits,” he warned.
The national average retail price for a dozen eggs reached $4.25 in December, compared with $1.79 a year earlier.according to the most recent government data.
Both Reed and Farm Action pointed to America’s leading egg producer Cal Maine Foods, reported last month that its quarterly sales were up 110%, bringing it $801.7 million thanks to record prices. The scenario, according to the applicants, helped the company generate earnings of $198.6 million. The year before, his earnings were a mere $1.1 million.
The prices that the firm charges its customers are determined through its negotiations with supermarket chains, wholesale stores and distributors to whom you sell your product. Cal-Maine said the median price for a dozen eggs was $2.71 in the most recent quarter. The figure is nearly double the $1.37 it charged a year earlier, but far less than the prices consumers are paying.
The Ridgeland, Mississippi-based company defended itself against criticism. He assured that the “market domestic egg has always been extremely competitive and highly volatile, even under normal circumstances” in prices. In this sense, he pointed out that he performs “everything possible to maximize production and keep the supply on store shelves.”
The rise in egg prices has been attributed to the millions of chickens that were slaughtered to contain the spread of bird flu as farmers have had to offset rising costs caused by inflation.
But even though about 43 million of the 58 million birds that have been culled in the past year to help control bird flu have been laying hens, the overall size of the animals was only reduced by 5-6% compared to to its normal size of about 320 million copies.
“At a time when food prices are high and many Americans struggle to buy food, we must review the industry’s role in perpetuating high prices and hold those responsible to account,” Reed said in his letter. to the commission.
But trade groups say commodity markets largely determine egg prices, and experts say the bird flu outbreak – combined with the sharp rise in the cost of gasoline, feed, labor and packaging, as well as the high demand for eggs – is the real culprit behind the rise in prices.
“Current egg prices They reflect many factors.many of which are outside the control of an egg producer,” said Emily Metz, president and CEO of the trade group American Egg Board.
“From my point of view, the basic principles of economics explain the price rise very well,” said Jayson Lusk, an agricultural economist at Purdue University. He said small reductions in egg supply can lead to large price increases because consumer demand for eggs remains unchanged.
The Federal Trade Commission did not respond to questions Tuesday about concerns about possible egg price manipulation. However, the agency generally does not comment on external requests for investigations.