Sen. Jack Reed on Monday referred to as for the Federal Commerce Fee to open an investigation into “potential worth 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 value of a dozen eggs climbed 138% in December in contrast with the identical time a yr prior, citing knowledge 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, in accordance with knowledge 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 most important 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 document egg costs, serving to it generate a $198.6 million revenue, up from simply $1.1 million a yr earlier.
US FARM GROUP CALLS FOR PROBE OF HIGH EGG PRICES
“Shoppers are used to seeing some volatility within the egg pricing market, however the present worth spike within the trade’s favor warrants cautious scrutiny. Unbiased federal watchdogs ought to take a look at the information and comply with the proof to make sure shoppers are handled pretty,” he mentioned within the letter to the FTC. Reed famous that the Division of Agriculture had discovered the value enhance within the sector was “a lot bigger than the decreases in manufacturing” attributable to the avian flu.
Despite the fact that 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 full flock has solely been down 5% to six% at anyone time from its regular measurement of about 320 million hens.
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“At a time when meals costs are excessive and lots of People are struggling to afford their groceries, we should look at the trade’s function in perpetuating excessive costs and maintain these accountable accountable for his or her actions,” Reed wrote.
A farmer-led advocacy group referred to as Farm Motion made the same request final week. It argued that there “seems to be a collusive scheme amongst trade leaders to show inflationary situations and an avian flu outbreak into a possibility to extract egregious income.”
Cal-Maine Meals advised FOX Enterprise in a press release that it “desires to guarantee its prospects we’re doing every thing we will to maximise manufacturing and hold retailer cabinets stocked” and that the “home egg market has all the time been intensely aggressive and extremely unstable even below regular market circumstances.”
The costs the Mississippi-based firm expenses are decided by negotiations with the grocery retailer chains, membership shops and distributors it sells to.
Cal-Maine mentioned its costs averaged $2.71 a dozen in the latest quarter. That’s nearly double the $1.37 it was getting a yr earlier, however nonetheless decrease than the costs shoppers are paying.
The Related Press contributed to this report.