Jack Reed called for an investigation into potential price gouging and other deceptive practices by the Federal Trade Commission, as egg prices have gone up.
The Rhode Island Democrat noted in a letter to the agency's chair, Lina Khan, that the price of a dozen eggs climbed 138% in December compared to the same time a year ago, citing data from the Bureau of Labor Statistics.
In December, egg prices increased to $4.25 from $1.79 during the same period in 2021, a 138% increase, according to data from the Bureau of Labor Statistics.
The million of chickens slaughtered to limit the spread of bird flu and farmers having to compensate for inflation driving up their costs have led to a spike in egg prices.
Reed was singled out by Reed because it reported last month that its quarterly sales had increased 110% to $801.7 million on record egg prices, helping it generate a $198.6 million profit, up from just $1.1 million a year earlier.
The current price spike in the industry's favor warrants careful scrutiny, as consumers are used to seeing some volatility in the egg pricing market. In a letter to the FTC, he said that federal watchdogs should look at the facts and follow the evidence to make sure consumers are treated fairly. Reed said that the Department of Agriculture had found that the price increase in the sector was larger than the decreases in production caused by the avian flu.
Around 43 million of the 58 million birds slaughtered over the past year to help control the flu have been egg-laying chickens, but the size of the total flock has only fallen 5% to 6% from its normal size of about 320 million hens.
Reed wrote that at a time when food prices are high and many Americans are struggling to afford their groceries, we need to examine the industry's role in perpetuating high prices and holding those responsible accountable for their actions.
A farmer-led advocacy group called Farm Action made a similar request last week. It was argued that there 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. Cal-Maine Foods told FOX Business that it wants to assure its customers that they are doing everything possible to maximize production and keep store shelves stocked, and that the domestic egg market has always been highly competitive and highly volatile even under normal market circumstances. The Mississippi-based company charges are determined by negotiations with the grocery store chains, club stores and distributors it sells to.
In the most recent quarter, Cal-Maine said its prices averaged $2.71 a dozen. It is almost double the $1.37 it was getting a year ago, but still lower than the prices consumers are paying.