Jan 19 (Reuters) – The Federal Commerce Fee (FTC) ought to study excessive egg costs for indicators of value gouging from high egg corporations, a farm group mentioned, as People proceed to pay greater than ever for the family staple.
U.S. regulators, farmers, and business have typically argued in recent times in regards to the energy of high agriculture companies to set costs and drive up what shoppers pay for groceries, reminiscent of when the value of beef skyrocketed in 2021.
The most recent concern is eggs, the value of which was up 138% in December from a 12 months prior, to $4.25 a dozen, in keeping with the Bureau of Labor Statistics.
The U.S. Division of Agriculture (USDA) has pointed to a file outbreak of avian flu as a purpose for the excessive costs. However the nation’s antitrust regulator also needs to study record-high income on the high egg firm, mentioned Farm Motion on Thursday in a letter to FTC chair Lina Khan.
Cal-Maine Meals (CALM.O), which controls 20% of the retail egg market, reported quarterly gross sales up 110% and gross income up greater than 600% over the identical quarter within the prior fiscal 12 months, in keeping with a late December submitting with the Securities and Alternate Fee.
The corporate pointed to decreased egg provide nationwide as a result of avian flu driving up costs as a purpose for its file gross sales. The corporate has had no optimistic avian flu exams on any of its farms.
U.S. egg manufacturing was about 5% decrease in October in comparison with final 12 months, and egg inventories had been down 29% in December in comparison with the start of the 12 months, the newest USDA knowledge exhibits – a major drop, however one that won’t clarify record-high costs, mentioned Basel Musharbash, an legal professional with Farm Motion.
“We would like the FTC to dig in and see if shoppers are being value gouged,” Musharbash mentioned.
The FTC declined to remark.
In an announcement, Cal-Maine mentioned that increased manufacturing prices, together with avian flu, had been contributing to increased costs.
The American Egg Board, an egg advertising and marketing group, mentioned in an announcement that egg costs replicate a wide range of components and that wholesale egg costs are starting to fall.
Practically 58 million chickens and turkeys have been killed by avian flu or to manage the unfold of the virus for the reason that starting of 2022, principally in March and April, in keeping with USDA. The earlier largest outbreak, in 2015, killed 50.5 million birds.
Cal-Maine shares have fallen in current weeks after climbing virtually 50% final 12 months.
Reporting by Leah Douglas
Enhancing by Invoice Berkrot and Alistair Bell
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