Food Price Spikes Could Be Criminalized as FTC Called to Investigate Eggs

A farmers’ group wants the federal government to investigate a recent spike in egg prices.

In a letter last week to Federal Trade Commission Chair Lina Khan, Farm Action notes that egg prices “more than doubled for consumers last year — from $1.788 in December 2021 to $4.250 in December 2022 for a dozen large Grade A eggs.”

The group’s efforts are happening as consumers on both sides of the Atlantic are dealing with rising food prices. The chairman of British supermarket chain Tesco said Sunday (Jan. 22) that some food companies may be using inflation as cover for unnecessary price hikes.

Asked by the BBC’s Laura Kuenssberg if the companies were taking advantage of the country’s poorest, John Allan said it was “entirely possible,” adding that his company was trying “very hard” to push back on price hikes it thinks are illegitimate.

Farm Action says industry consultants and leading egg producers have blamed the spike on “supply disruption, ‘act of God’ type stuff.” And recent data from the government shows consumers facing rising grocery prices across a number of categories.

However, Farm Actions’ letter argues eggs are a different story and calls on the FTC to “end abusive price gouging in the egg industry.”

The group says “the real culprit behind this 138 percent hike in the price of a carton of eggs appears to be a collusive scheme among industry leaders to turn inflationary conditions and an avian flu outbreak into an opportunity to extract egregious profits reaching as high as 40 percent.”

The U.S. Department of Agriculture (USDA) has pointed to a record strain of avian flu as a reason egg prices have climbed so high.

“As a result of recurrent outbreaks, U.S. egg inventories were 29 percent lower in the final week of December 2022 than at the beginning of the year,” the USDA said in a recent report. “By the end of December, more than 43 million egg-laying hens were lost to the disease itself or to depopulation since the outbreak began in February 2022.”

However, Farm Action says the FTC should also look at record-high profits at Cal-Maine Foods, a company the letter says controls 20% of the market.

In a statement on its website, Cal-Maine said that rising production costs, and the bird flu, had contributed to the higher egg prices.

As PYMNTS has reported, recent figures from the Bureau of Labor Statistics (BLS) showed that grocery prices in December were up 11.8% year over year, with some categories climbing even higher. Prices for cereals and bakery products rose 16.1%, while dairy prices were up 15.3%.

Meanwhile, research by PYMNTS continues to show a gap between government numbers on price increases and consumer perception of those price spikes, according to the report “Consumer Inflation Sentiment: Perception Is Reality.”

“Many consumers disagree with the BLS’ numbers, reporting increases up to two times higher across multiple grocery categories,” the study says. “On average, consumers report that grocery prices have increased 22% in the last year. The biggest gap can be seen in fresh meat and vegetables, with the BLS reporting a 4.5% increase versus consumers’ perceived 25% increase.”

For example, consumers who live paycheck to paycheck and struggle to pay bills “reported a perceived 27% increase in grocery prices, as opposed to the 17% increase reported by those not living paycheck to paycheck. The BLS, however, reports an 11% increase.”