Eggs, a typically unremarkable grocery list staple for most Americans became
a point of financial stress and confusion over the course of a single year.
Between January 2022 and January 2023,
the average price consumers were paying for a carton of eggs shot up by 150%.
>> Now how did that happen and more importantly why did that happen?
New reporting indicates that some of the largest egg producers
in the country just use the excuse of avian flu to jack up their
prices even when avian flu had no impact on their operations.
So we have yet another example of corporations taking
the inflation narrative and running with it, using it for their own advantage
in order to maximize profits and they brag about it to their shareholders.
It is such an incredible story.
Now more perfect union looked into the profits of egg producers
as the avian flu narrative was playing out.
Let's watch.
>> Dominant egg producers not only made up for lower supply and
increased costs, they profited off that big time.
Just look at Cal-Maine Foods gross profit margin.
Gross profit margin measures how much money a company earned after accounting
for production costs.
Cal-Maine Foods more than quadrupled its gross profit margin after
raising the price of its eggs.
If Cal-Maine fairly raise prices to offset inflation and
the avian flu, its gross profit margin would stay about the same.
>> Weird, weird, so how does a company rake in massive
profits if they have less supply to sell, right?
And more importantly, do the price hikes really
bode well with the lack of supply, right?
Like can they actually explain it based on the impact that
avian flu had on their business operations?
That's a better way of asking the question.
Well, it turns out that Cal-Maine's supply actually wasn't
impacted by avian flu at all, at all.
Don't believe me, watch.
>> Since Cal-Maine Foods is the largest egg producer and distributor in the US,
we're gonna keep our focus there.
Cal-Maine's CEO Sherman Miller recently celebrated his company's record sales and
net income for the second quarter of fiscal 2023.
The company made over $300 million in the second half
of 2022 while the price of eggs was skyrocket.
In the company's December earnings report, Cal-Maine's CEO attributed
the company's record average selling prices for conventional eggs to a reduced
supply related to the outbreak in the US of highly pathogenic avian influenza.
In the same breath, CEO Sherman Miller says, there have been no
positive tests for this bird flu at any of Cal-Maine Foods' owned or
contracted production facilities as of December 28 2022.
>> So one of the largest egg producers in the country was telling shareholders,
like, avian flu is really screwing with the supply.
We're doing real well though, look at our profits.
Am I right?
Also avian flu has had no impact on us whatsoever.
Meaning, let's just keep it real guys.
They took the avian flu narrative and
they used it as an excuse to jack up prices by a lot, by a lot.
The egg industry by the way, pretty sure most people don't know this,
because corporate media doesn't cover it, but here's the update.
The egg industry experienced no substantial decline in egg production
in the last quarter of 2022 compared to 2021, which shocked me.
I couldn't believe it, because every story was about like if
a farm finds one hen that test positive for avian flu,
they have to get rid of all the hens, meaning they have to kill all of them.
So I bought it, I got to be honest, I bought it.
I'm like, this makes sense, this makes sense.
I mean, that's gonna limit supply, except it turns out the hens that
remained were actually producing more eggs than they usually do.
I think there should be a little bit of an investigation into that because why,
how did that happen, okay?
So there was actually no substantial decline in egg production.
The number of egg laying flocks on average only dropped 6% from
the year prior according to the US Department of Agriculture.
And as I mentioned earlier, the egg laying hens that remained were
producing eggs like crazy which closed that 6% gap in the supply.
Now the bird flu outbreak for sure doesn't account for
the 150.5% increase in the net average price for
a dozen of Cal-Maine's conventional eggs from one year to the next.
I just really wanna emphasize that.
They weren't impacted, their supply wasn't impacted but
they raised prices to the tune of 150% anyway.
And what about other inflationary pressures, right?
Because businesses are impacted by inflationary pressures as well.
I mean, the cost of feed, I'm sure that took some part in the price increase.
But to the tune of 150%, Cal-Maine's total farm production and
feed costs in 2022 were just 22% higher than they were in 2021.
So that still doesn't justify hiking prices to the tune of 150%.
And then there's also the problem with the lack of competition in the egg
industry and it looks like major producers were potentially withholding
increased production, and there are some farming groups that are calling them out.
So Farm Action, a farmer led advocacy group, claims the real culprit
is a collusive scheme among major egg producers to fix and gouge prices,
the organization said in a letter to the Federal Trade Commission.
Doing so has helped producers extract egregious profits reaching as
high as 40% according to the letter, which asks the FTC Chair Lina Khan
to investigate for potential profiteering and foul play.
I would also encourage Chairman Bernie Sanders who chairs an important
committee in the Senate to also look into this,
potentially have some hearings about it because I'd love to learn more.
I'd love to know how it is that egg producers that clearly based on
the numbers did not experience a sharp decline in their production
can justify hiking up prices to the tune of 150%.
I think the American people deserve to know, and we should hear their answers.