'Shelling out' too much for eggs? Sen. Reed asks FTC to investigate price gouging
Is something fowl afoot?
With egg prices forcing consumers to shell out more, U.S. Sen. Jack Reed is asking the Federal Trade Commission (FTC) to look into whether large egg companies are engaged in the"fowl play" of price gouging.
"I write to urge the Federal Trade Commission to open an investigation into potential price gouging and other deceptive practices by the country’s largest egg companies that appear to be contributing to cost increases for American consumers," Reed wrote in a letter on Tuesday.
Why do eggs cost so much?
By the end of December 2022, the price of a dozen eggs had surged 267% from the start of the year, according to the U.S. Department of Agriculture, leaving consumers paying an average of $4.25 a carton. The price hike was widely blamed on an Avian flu outbreak that killed millions of egg-laying hens, combined with a seasonal supply-and-demand issue.
Prices have started to come down, with the typical carton in the Northeast now costing $3.30 to $3.34, according to a USDA report issued Monday.
Egg companies report record profits, leading to concerns about price gouging
Despite the hardship egg companies are reportedly facing, the largest U.S. egg producer, Cal-Maine Foods, reported record profits in the most recent quarter.
This, Reed wrote, "could be an indication of price gouging." He also pointed to:
An American Egg Board report that said flocks are only 6% below normal levels.
A May 2022 report from the USDA that said the price increase was "much larger than the decrease in production."
The USDA observed, "little effort among the largest egg producers to increase production to moderate prices."
He also said local egg producers, "which have faced many of the same market challenges as the biggest producers, have managed to keep the prices under control."
What happens now?
Reed is not the only one calling for an investigation. The lobbying organization Farm Action sent the FTC a similar letter last week.
Ultimately, it's up to the FTC to decide whether it wants to open the investigation and, ultimately, whether to levy any punishments, such as fines, against companies in the industry.
This article originally appeared on The Providence Journal: Egg prices are high. Sen. Reed wants FTC to investigate price gouging
