When the holiday-induced baking frenzy handed and demand for snickerdoodles slowed, many thought egg costs would fall. The price of a dozen had surged by greater than that of another grocery store merchandise, from $1.79 to $4.25 within the yr to December 2022. May they get any pricier? Certainly they may. When January got here to an in depth, Joe Biden advised America that meals inflation was cooling. However egg costs had risen by one other 13.5%.
The Division of Agriculture blamed final yr’s worth spike on an avian-flu outbreak that killed 43m of America’s egg-laying birds. Trade lobbyists say that the rising prices of feed, gasoline and labour additional pushed up costs.
Such issues are inclined to beget shortages, however Cal-Maine Meals, which has 20% of the market and is the nation’s greatest egg producer, offered extra eggs in 2022 than in 2021 (the corporate sells about 12bn eggs a yr). Although flocks within the business total had been a tad smaller, the Stakhanovite hens laid extra. In the end inflation and flu introduced a boon to Massive Egg. Whereas the S&P 500 fell by 9% final yr, Cal-Maine’s shares rose by 17%. The agency generated $800m in gross sales within the last quarter of 2022, a 110% enhance on the identical interval the earlier yr; gross income elevated seven-fold.
Farm Motion, an advocacy group which helps small farmers (and hates genetically modified crops), has accused Cal-Maine and two different large egg corporations of worth gouging, arguing that the virus, supply-chain disruptions and inflation collectively don’t justify the value rises. The companies, Farm Assist argued in a letter to the Federal Commerce Fee, cite these developments to cover unjustified worth hikes. Collectively the three account for near 40% of eggs offered in America, a powerful (or worrying) quantity of market energy.
Cal-Maine rejects the accusations levelled at it by Farm Motion. “No matter market situations, Cal-Maine sells its eggs primarily based on the pricing negotiated with every buyer and has achieved so persistently all through our historical past, whether or not at a revenue or a loss,” the agency says.
If the hovering income had been only a reflection of regular market energy, different meals corporations should have seen them too. However there was no such bonanza within the meatpacking business, which, run by a handful of highly effective companies, is usually accused by farmers of performing like an oligopoly. Pre-tax income on beef, pork and ready meals at Tyson Meals, one of many greatest meatpackers in America, had been down within the fourth quarter. Quick-food companies didn’t do too nicely, both. Web revenue at PepsiCo, which sells snacks in addition to sugary drinks, was lower than half what it was throughout the identical interval the earlier yr.
To the reduction of the nation’s bakers, scramblers and lovers of pisco sours, the value of eggs got here down in February. The price of a dozen fell by 12.7%, to $4.21. However that’s nonetheless greater than double final yr’s worth. If the value of eggs doesn’t proceed to fall within the coming months, then Massive Egg might discover federal businesses accountable for issues aside from rates of interest and agriculture crack down on worth rises. And when the feds become involved, it’s no yolk. ■
Keep on prime of American politics with Checks and Balance, our weekly subscriber-only publication, which examines the state of American democracy and the problems that matter to voters.
