As a result of a spike in egg prices the Senator calls for an investigation into price gouging

As a result of a spike in egg prices the Senator calls for an investigation into price gouging

Senator Jack Reed on Monday asked the Federal Trade Commission to open an investigation into “possible price gouging and other deceptive practices” as egg prices rose.

The Rhode Island Democrat noted in a letter to the agency’s chairman, Lina Khan, that the price of a dozen eggs climbed 138% in December compared to the same time a year earlier, citing data from the Bureau of Labor Statistics.

Egg prices in December increased to $4.25 from $1.79 in the same period in 2021, a 138% increase, according to data from the Bureau of Labor Statistics.

The spike in egg prices has been attributed to the millions of chickens killed to curb the spread of bird flu and farmers have had to compensate for inflation which has increased their costs.

Reed singled out the largest US egg producer, Cal-Maine Foods, as it reported last month that its quarterly sales jumped 110% to $801.7 million on record egg prices, helping it to a $198.6 million profit. generation, up from just $1.1 million in the previous year.

US FARM GROUP ASKS RETURN ON HIGH PRICE OF EGGS

Sen.  Jack Reed

Senator Jack Reed speaks on the phone as he leaves a closed lunch meeting with Senate Democrats at the U.S. Capitol on January 24, 2023. (Draw Anger / Getty Images / Getty Images)

“Consumers are used to seeing some volatility in the egg pricing market, but the current price spike needs careful scrutiny in favor of the industry. Independent federal regulators should look at the facts and follow the evidence to ensure that consumers are treated fairly,” he said in the letter to the FTC. Reed noted that the Department of Agriculture found that the price increase in the sector “far outweighed the reductions in production” caused by bird flu.

Although about 43 million of the 58 million birds killed in the past year to help control the flu were egg-laying chickens, the size of the entire flock at any one time fell only 5% to 6% from its normal size. of about 320 million chickens.

A woman is shopping for eggs

Egg shelves are seen with a note apologizing to customers for the price increase in San Mateo, California, on January 23, 2023. (Tayfun Coskun/Anadolu Agency via Getty Images / Getty Images)

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“At a time when food prices are high and many Americans are struggling to afford their groceries, we must examine the industry’s role in perpetuating high prices and hold those responsible for their actions,” wrote Reed.

A farmer advocacy group called Farm Action made a similar request last week. He argued that “it appears to be a collusive scheme among industry leaders to turn inflationary conditions and an outbreak of bird flu into an opportunity to make huge profits”.

Cal-Maine Foods told FOX Business in a statement that it “wants to assure its customers that we are doing everything we can to maximize production and keep store shelves stocked” and that “the domestic egg market was in always very competitive and very volatile even about it. normal market conditions.”

Eggs at a Michigan grocery store

Eggs for sale at a grocery store in Detroit, Michigan, on January 18, 2023. (Matthew Hatcher/Bloomberg via Getty Images/Getty Images)

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The prices charged by the Mississippi-based company are determined through negotiations with the grocery store chains, club stores and distributors they sell to.

Cal-Maine said its prices averaged $2.71 a dozen in the most recent quarter. That’s almost double the $1.37 he was getting a year earlier, but still lower than the prices consumers are paying.

The Associated Press contributed to this report.

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