Are Egg Producers Manipulating Prices? DOJ Investigates Antitrust Allegations

The Department of Justice is currently investigating accusations of anti-competitive behavior among egg producers amid allegations of price manipulation.

Key Takeaways

The DOJ’s investigation targets major egg producers for suspected supply restriction tactics during a bird flu outbreak.
Egg prices have surged nearly 15.2% in January, exacerbating costs across the board.
The Agriculture Department has earmarked $1 billion to mitigate these issues, emphasizing biosecurity and research.
Critics argue that the government response to the bird flu has been overly aggressive and ineffective.

DOJ Targets Egg Producers

The Justice Department is investigating potential illegal collusion among major egg producers. Suspicions arise that these entities may have manipulated supply amid an ongoing bird flu outbreak to inflate prices. Reports indicate a focus on whether companies like Cal-Maine Foods and Rose Acre Farms engaged in illegal practices by sharing sensitive pricing and supply information.

Price increases have reached as high as $12 per dozen in certain areas, with national averages around $5. Farmers allege that some producers are deliberately slow in replenishing flocks to keep supply low. In the past, a federal jury has found several producers guilty of similar schemes, raising concerns among critics.

Economic Implications and Actions

Wholesale egg prices have surged by 255%, compelling the Agriculture Department to invest up to $1 billion. This initiative will fund farm biosecurity, vaccine research, and measures to support backyard egg production. Despite these efforts, many eateries are imposing surcharges on egg dishes to mitigate costs.

Antitrust enforcers suspect that the price surges outstrip the losses suffered by producers due to the bird flu epidemic. Farm Action has backed the investigation, citing the need for accountability in corporate practices.

Critique of Response Efforts

Critics argue that the mass culling as a response to bird flu is disproportionate and ineffective. Joel Salatin, a vocal opponent, criticized the blanket extermination of birds, arguing for alternative breeding strategies to enhance genetic resistance.

Critics also question the hesitant use of vaccines by USDA, with opposition from health agencies citing concerns over efficacy. The agency is also considering regulatory reviews and potentially importing eggs to augment supplies.