the cost of eggs cost of eggs eggs eggs eggs 7. 37 cents last week the
cost of eggs has been soaring across the country the cost of eggs climbed the most
in the last year price for a dozen eggs has skyrocketed so what is causing the price surge
I got a long history with eggs I like them scrambled I like them on breakfast sandwiches
I like them with bagels and cream cheese and I especially like them with breakfast burritos if
it wasn't clear by now I really like eggs so naturally I'm upset about how the price of my
morning companion has been drastically increasing how drastic well that's up more than five dollars
from the same time last year when a dozen eggs cost only two dollars and 35 cents when I went
to the grocery store last the store was out of the cheapest eggs which are the ones that
I usually get and I ended up paying six dollars for a dozen eggs granted they were the fancier
brown eggs free range and that sort of thing but still it was expensive and not what I would
have normally chosen egg prices have more than doubled for consumers last year going from 1.78
in December 2021 to four dollars and 25 cents in December 2022 for a dozen large grade A eggs so
that got me thinking what the hell is happening I'd heard about the avian flues and the chicken
deaths leading to shortages and that makes sense chickens do lay eggs but then I came
across something that I did not expect a series of lawsuits alleging illegal actions and collusion
between big businesses aimed at squeezing the consumer welcome to eggspiracy Welcome to the
eggspiracy buckle up buttercups this is gonna get wild but we can't talk about eggs without talking
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eggsperity consumers know that in this country something's wrong at the grocery store with 138
percent increase in the price they're paying for eggs it's obvious to us when we look at the profit
that these companies are making over 960 percent profit that something's wrong something's a foul
price fixing is the practice of companies who are supposed to be competing and then they decide to
get together and they form their own prices in the U.S this is illegal in most aspects of our economy
there is however a long-standing history of companies doing this because companies have like
money in 2010 Landa Lakes agreed to a 25 million dollar settlement in a suit about price fixing
regarding eggs and that happened when the price of eggs soared that's a little bit of foreshadowing
for you in 2020 a federal probe about chicken price fixing led to charges against 10 Executives
across multiple operations including Purdue Farms Tyson [ __ ] foods and others this got resolved
this year after two hung juries after which the government decided to not pursue convictions with
the mistrials kind of suspicious huh however several multi-million dollar settlements came
out of civil lawsuits against the companies the total for these settlements is probably a lot
more than you would expect given that this is for eggs in Illinois a 181 million dollar settlement
was reached against the companies and this is one of the only States in which lawsuits were
filed just this week I started reading about calls for investigations into collusion of the industry
again as egg prices are skyrocketing Senator Jack Reed of Rhode Island called for the FTC to
investigate and a farmer advocacy group called Farm action calls for the exact same thing so
let's take a look at it there are quite a few good documentaries on companies like Tyson one of them
is on Netflix and it has an episode that I'm going to be referencing but it's called rotten the basic
thing to know from that episode is this larger companies utilize contracts with poultry Farmers
owning and controlling much of the specifics on things like grain feed and the chickens themselves
the company delivers them to Farmers who then serve as caretakers on the ground the chickens
then lay their eggs and the farmer delivers them to Tyson at a contract price the contract price
here is really critical these contracts often serve to lock the farmers in because they're
financing their operations with debt to create the large facilities needed to house these Mass
amounts of chickens and to make matters worse when egg prices go up you think that would help
the farmers who are struggling to make ends meet but it doesn't because of their contracts only
the larger companies benefit and even though the farmers may be independent operations they
say that they have no other options than to keep accepting contracts even if they're getting worse
due to the need to service the debt that they took on to build the operation it's a really
vicious cycle this gives a lot of Leverage to the egg producers farmers are graded in a tournament
system where the most successful farmers are awarded contracts and the bottom performers are
cut and having your contract cut can mean losing the farm it also means that farmers don't tend to
be the ones benefiting from these higher prices it's the companies Who deliver the eggs to the
grocery stores so you're probably asking yourself how are these really big companies doing with all
of this well for this we're going to focus on egg specific producers as larger companies often
don't break out the data on eggs specifically versus chickens generally so let's just look at
one of the largest producers Cal Maine they're one of the companies in the spotlight for the
alleged collusion and they're the largest egg producer with 20 of the market they are also a
public company so as you can probably guess I read through the annual report and as you
can see egg sales have grown significantly in 2022 on the order of about 32 percent profit on
the other hand more than doubled net average shell egg price Grew 29.7 From 2021 to 2022
very close to the growth in profit interesting huh the company's gross margins also increased
steadily from a little over 19 in the first quarter of 2022 which was a 45 year-over-year
increase to nearly 40 percent in the last quarter of 2022 a 345 percent year-over-year increase for
a giant and well-established company who made no significant changes other than to the egg prices
themselves this kind of growth is almost unreal The Profit growths here are astounding for the 26
week period ending on November 26 2022 Cal main reported a 10-fold year-over-year increase in
Gross profits from 50 million to 535 million and a five-fold increase in its gross margins Cal Main
and other producers claim the price increases are from inflation affecting their costs and
2022's avian flu outbreak and that's actually caused by the highly pathogenic evening influenza
more commonly known as bird flu that is just swept through the country so let's talk about that avian
flu killed about 43 million laying hens in the U.S last year mostly in March and April which was
about five percent that's a lot of chickens but it is not the first time this has happened in 2015
about 12 percent more than double of laying hens were killed by an avian flu outbreak according to
the Department of Agriculture price is that year doubled yet this year prices have about tripled
with less than half the amount of hens that were killed I think the letter from Farm action sums
this up very nicely fundamentally calmaine seems to be engaging in price leadership using the avian
flu outbreak and the inflationary conditions of the past year as cover to establish a new focal
point for egg prices one that will not only pass through cost inflation but also radically enhance
the industry's pre-2022 profit margins so how does Cal Maine describe their success here's what their
chief of Finance Max Bowman said the significantly higher selling prices are enduring focus on cost
control and our ability to adapt to inflationary Market pressures led to improved overall
profitability honestly those two sentences sound pretty similar to me except one is spinning it far
more positively you could even call them sunny side up oh God I'm so sorry for that one also
while having higher prices by itself might not mean thing having those higher prices because of
allegedly price fixing is a completely different story this isn't how capitalism claims to work
it should be if one firm raises their prices significantly then another can swoop in and take
their market share instead everyone is raising their prices and overall there has not been a
drop off in egg production which is what you would expect if avian flew wiping out the flocks was to
blame so what does this all amount to well what I see looks like companies taking advantage of a
time of inflation some crisis headlines and using it to jack up the prices of eggs a product that
there isn't an easy substitute for twenty percent increased costs don't justify 300 increased prices
what the industry did before and has done before with other things it sure looks like it's doing
again under the cover of inflation and to the detriment of you and me I tried to think of an
egg pun to end it on but I just couldn't bring myself to say it anyway way thanks for watching
if you made it this far I have a question for you I know this subject is kind of out of my Channel's
Main Avenue but I thought you might find it interesting because I found it interesting
and it's still collusion it's still price fixing and if you did find it interesting comment down
below also if you didn't comment below and tell me you didn't like it alright that's it see you guys
I have a long history with it this is so stupid I have a long history with
it I have a long history with eggs I got a long history with eggs I got a long history with eggs