Still-high egg pricing draws scrutiny from members of Congress

Consumers saw little relief from sky-high egg prices in January, and two members of Congress are looking for an explanation from top egg-producing companies.

The January Consumer Price Index showed egg pricing at 70.1% higher than a year ago, the U.S. Bureau of Labor Statistics (BLS) reported this week. Egg prices in January also were up 8.5% from December, which followed an 11.1% jump from November.

Through Feb. 10, the average national retail price of a dozen white USDA Grade A eggs stood at $3.99 and brown cage-free eggs at $4.99, compared with $2.77 and $2.64 a year earlier, respectively, according to the U.S. Department of Agriculture’s latest National Retail Report for Shell Egg and Egg Products.

Food shoppers, though, continue to see some eye-popping price tags on eggs. For the week of Jan. 29 to Feb. 5., maximum prices for a dozen eggs across the 50 states and the District of Columbia ranged from $4.54 in Maine to $7.59 in Hawaii, real-time CPG product data specialist Datasembly reported. Consumers in populous states weren’t spared, as top prices for the week were $6.66 in California, $5.32 in Texas, $4.71 in Florida, $5.12 in New York, $4.61 in Pennsylvania and $5.05 in Illinois.

On Thursday, Sen. Elizabeth Warren (D., Mass.) and Rep. Katie Porter (D., Calif.) sent letters to the CEOs of five of the nation’s largest egg producers—Cal-Maine Foods, Rose Acre Farms, Hillandale Farms, Versova Holdings and Daybreak Foods—that called for more information on high egg pricing and why prices remain elevated. The lawmakers expressed concern about the possibly of price gouging amid an ongoing epidemic of avian flu, which has decimated populations of egg-laying hens, and supply chain disruptions.

“I am writing regarding my concerns about the elevated price of eggs and the extent to which egg producers may be using fears about avian flu and supply shocks as a cover to pad their own profits at the expense of American families,” Warren and Porter wrote in the letters to the egg producers. “Although wholesale prices are finally starting to drop, they have not yet dropped for retail consumers. And given the extent to which the high prices of eggs in 2022 and early 2023 harmed consumers and small businesses, we have ongoing questions about what caused the massive spike in egg prices—and how to make sure it is not repeated.”

Shortages of eggs due to widespread avian flu and supply chain issues, among other factors, have hoisted prices for consumers at the shelf. / Photo: Russell Redman

For example, in the letter to Cal-Maine Foods—cited by Warren and Porter as the largest U.S. egg producer, controlling roughly 20% of the retail egg market—the two lawmakers said the company announced a 65% annual increase in third-quarter 2022 profits amid “record-high egg prices” and no positive cases of avian flu on its farms. Warren and Porter’s letter also said that, in December, Cal-Maine reported a gross-profit gain of 600% over the same quarter in 2021, which the company claimed was “driven by record average conventional egg selling price.”

In late January, Ridgeland, Mississippi-based Cal-Maine Foods issued a statement explaining the causes behind elevated egg pricing, pointing namely to historic levels of avian flu.

“Many factors play a role in increased egg prices, most notably the recent impact of the highly pathogenic avian influenza (HPAI), which has significantly reduced the national hen supply, while consumer demand for shell eggs remains good,” Cal-Maine Foods stated.

The company noted that the current HPAI epidemic in the United States has exceeded the 2014-15 outbreak in the number of affected hens, and the diseases continues to circulate across commercial flocks and the wild bird population in the U.S. and abroad.

Citing a Dec. 27 report by the USDA division of Animal and Plant Health Inspection Service, Cal-Maine said 43.3 million commercial layer hens and 1 million pullets were depopulated due to HPAI in 2022. The company also said that, as reported by the USDA through Jan. 1, hen numbers for table or market-type eggs totaled 306 million, down 6% year over year.

In good news for shoppers, signs of potential price relief in the egg category have recently begun to surface. / Photo: Shutterstock
 
“In addition, like all other industries, egg production is being affected by increased input costs. In particular, the cost of feed, labor, fuel and packaging have risen considerably, which affects the cost of production and, therefore, wholesale and retail prices of eggs,” Cal-Maine added. In its statement, Cal-Maine also noted, “The company does not sell eggs directly to consumers or set retail egg prices.”

Warren and Porter, citing data from the U.S. Bureau of Labor Statistics, said in their letters that retail price hikes eggs have topped those for all other food categories, surging 59.9% year over year as of December, with prices exceeding $7 per carton in some states. They reported that the avian flu outbreak has affected approximately 43 million egg-laying chickens—decreasing the total size of the flock by no more than 6% in most months—and total table-egg production was down no more than 4.2% as of October.

“American families working to put food on the table deserve to know whether the increased prices they are paying for eggs represent a legitimate response to reduced supply or out-of-control corporate greed,” Warren and Porter’s letter said. “Although wholesale prices have decreased, consumers are still waiting for relief at the grocery checkout, which could take several more weeks.”

Of late, egg pricing appears to be relaxing somewhat. Datasembly reported that its latest data indicate cooling egg prices in 39 of 50 states. For the week of Jan. 29 to Feb. 5, decreases in maximum egg prices ranged from just over a half-percent to nearly 8% on a weekly basis. States with biggest drops in egg prices, Datasembly said, included Minnesota (-7.88%), North Dakota (-6.8%), South Dakota (-6.25%), Utah (-6.17%), New Jersey (-5.65%), Alabama (-5.14%), Connecticut (-5.10%), Pennsylvania (-4.98%), Oklahoma (-4.92%) and Iowa (-4.83).
 
Consumer market data firm Numerator pegged egg price inflation at 35.9% year over year in January but reported that pricing in the category dipped 0.5% from December. Numerator noted that its data captures prices paid by a representative panel of 105,000 U.S. consumers for items they actually buy in real-time during a given month, while the CPI captures prices for a basket of goods selected based on the likelihood that a sample of 24,000 households bought those items in a prior year.

Shoppers search for price relief on eggs has led them to store brands. In its annual industry report, released Thursday, the Private Label Manufacturers Association had fresh eggs at the top of the 25 fastest-growing billion-dollar categories in private brands, with sales up 49.6% year over year to $5.7 billion in 2022, based on IRI Unify data.