Tuesday 16 May 2023

CNN Explains Why Egg Prices Soared, Gets It All Wrong

 Just a couple of months ago, the cost of a dozen eggs surpassed the price of a pound of beef, marking the first time that’s happened since the U.S. Bureau of Labor Statistics began keeping data in 1980.

The average price of a dozen large Grade A eggs was $4.82 in January 2023, while a pound of ground beef was $4.64. In January 2022, eggs were $1.93, and beef was $4.77, but egg prices have soared by 70% in the last year alone.

Back then, the mainstream media blamed it on avian flu, inflation, and supply chain issues. And just on Monday, CNN weighed in with a new story headlined, “Egg prices are crashing. Here’s why.”

But the story was riddled with oddities.

“As of last week, Midwest large eggs — the benchmark for eggs sold in their shells — cost just $0.94 per dozen in the wholesale market, according to Urner Barry, an independent price reporting agency,” CNN reported. “That’s a sharp fall from $5.46 per carton just six months ago. (In retail, prices are well above $1 per carton, though they too have been declining.)”

CNN put that price drop down to “a reversal of supply-demand trends,” claiming that prices soared as chicken farmers paid higher prices for food and fuel.

But then the network said this: “The disruptions gave producers like Cal-Maine Foods (CALM), the largest US egg distributor, cover to hike prices way up and rake in huge profits.”

Whoa, hang on. I thought the egg producers were hurting, what with all this avian flu and inflation. Now you say they had huge profits?

That part is accurate. Cal-Maine Foods more than doubled its revenue in the first quarter of 2023 to nearly a billion dollars — and profits surged 718%, The Daily Wire reported. And production wasn’t down. Cal-Maine, which controls about 20% of the domestic egg market, said the total number of eggs it sold rose by 1%, CNN reported.

Eventually CNN gets around to the real reason egg prices are falling — “demand hasn’t kept pace.”

That’s right. When retailers began charging $7, $8, even $10 a dozen and higher, buyers went, nuh uh.

“Shoppers are budget conscious at that time,” Brian Earnest, lead economist for animal protein in CoBank, told CNN. “So typically, they’re probably putting more eggs in their basket than they normally do. But if you’ve got a high price environment, they’re not over-buying.”

Farm Action, a farmer-led advocacy group, knew the real story all along. It said the “real culprit” behind sky-high prices is a “collusive scheme” among top U.S. egg producers to fix prices to gouge consumers.

In a January letter to the Federal Trade Commission (FTC), Farm Action said the alleged collusion has helped egg producers “extract egregious profits reaching as high as 40%.”


The letter said avian flu was never to blame. “Examining publicly-available financial data from the egg industry, the letter determines that the supply disruption caused by the avian flu outbreak had an ‘apparently mild impact on the industry,’” the group said in a press release.

“In the end, what Cal-Maine Foods and the other large egg producers did last year — and seem to be intent on doing again this year — is extort billions of dollars from the pockets of ordinary Americans through what amounts to a tax on a staple we all need: eggs,” the letter states.

At the time of its letter, Farm Action didn’t know how right they’d be: Cal-Maine’s profits would soar 718% in the next three months.

In the end, egg producers just saw an opportunity to jack up prices with inflation soaring across the country. Now, having gouged consumers — who backed away in droves — they’re dropping their prices.

That’s the real reason.

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