The US’s largest egg producer has reported soaring profits as consumer prices hit record highs thanks to avian flu – and alleged price-fixing which is being investigated by the Department of Justice.
Cal-Maine’s profits more than tripled compared with the same quarter last year – and are nearly eight times as high as at the start of the bird flu outbreak in February 2022, according to financial results published on Tuesday.
The company, which produces 20% of the eggs eaten in the US, made $1bn in windfall income in the first three-quarters of the financial year – the profits extracted after accounting for production, processing and transport costs.
Meanwhile, consumer prices hit $5.90 a dozen in February – almost twice the price of eggs just 12 months earlier, and triple the average cost at the start of the bird flu outbreak, according to the Bureau of Labor Statistics.
The price of eggs was a major issue during the 2024 election, with Donald Trump and many voters blaming above inflationary prices on Joe Biden’s economic policies.
In March, the Guardian reported how major egg corporations such as Cal-Maine may be using the avian flu as a pretext to hike up prices. Days later, the Trump administration opened an investigation into price-fixing by the nation’s largest egg corporations, including Cal-Maine.
On Tuesday, Cal-Maine said that its sales almost doubled to $1.42bn in the fiscal third quarter, which ended on 1 March, primarily down to raising egg prices, which has hurt consumers who rely on the once affordable protein source.
But the company’s shares then fell by more than 4% after acknowledging that it was being investigated by the justice department’s anti-trust division. Mississippi-based Cal-Maine said it received notice of the investigation into egg price increases last month and that it was cooperating with the investigation.
“Corporate greed is contributing to sky-high egg prices. While Americans struggle to put food on the table, big ag is raking in billions, using the crisis as cover to reap record high profits,” said Amanda Starbuck, the research director at Food & Water Watch (FWW), a consumer advocacy group.
“If President Trump has any interest in fulfilling his campaign pledge to lower food prices, he must begin by taking on the food monopolies exploiting pandemic threat for profit. He can start by hastening and prioritizing his investigation into corporate price fixing.”
The egg production industry – like the retail sector that producers mostly sell to – is highly concentrated. This gives a handful of big corporations the opportunity to influence prices outside of the impact of shocks such as avian flu and the Covid-19 pandemic on supply and demand.
A recent FWW investigation shared exclusively with the Guardian, The Economic Cost of Food Monopolies: The Rotten Egg Oligarchy, details how Cal-Maine has used the bird flu crisis to reap profits by increasing consumer prices. Cal-Maine did not experience any bird flu outbreaks in its flocks in its 2023 fiscal year – and actually sold more eggs in 2023 than in the previous two years.
Cal-Maine has been contacted for comment.
