Americans have been shelling out high prices for eggs in recent years, and at least one egg producer is reportedly raking in profits while also accepting government payments.
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Audacy has reported that high egg prices have been linked to avian flu outbreaks that required producers to euthanize infected chickens. Fortune reported this week that Cal-Maine, which produces around one-fifth of the nation’s eggs, lost 4% of its flock in recent years due to the outbreaks.
Citing USASpending.gov, the outlet reported that Cal-Maine received $42 million in compensation for avian flu from the U.S. Department of Agriculture. It explained that the USDA has an indemnity program that pays a set price per bird killed, as well as other compensation for cleaning and disinfecting.
However, Fortune also reported that avian flu apparently hasn’t been impacting the company’s profits. In fact, it said that Cal-Maine’s “coffers have swelled since the bird flu epidemic began,” with sales quadrupling from 2021 to this year even though the company only sold about 20% more eggs. According to Fortune, the company’s profits tripled in the last quarter.
During the first three months of this year, Cal-Maine’s profits skyrocketed to $508 million, Fortune said.
“The higher net sales were primarily driven by an increase in the net average selling price of shell eggs,” Cal-Maine has said, adding that the prices are “a direct result of the reduced supply of shell eggs across the industry due to [avian flu] during a period of peak seasonal demand for eggs and egg products.”
Fortune noted that the White House “says egg prices are coming back down to earth,” and Audacy also reported that President Donald Trump pledged to use real eggs during the annual Easter Egg Roll amid concerns about avian flu and high prices. Chicken farmer Mandy Fedinetz too told KDKA Radio this week that avian flu outbreaks have been slowing and prices are coming down.
The Consumer Price Index report released this week by the U.S. Bureau of Labor Statistics showed that, although overall inflation was down in March, the index for food increased 0.4% last month. The index for meats, poultry, fish, and eggs rose 1.3%, “driven primarily by a 5.9-percent increase in the index for eggs,” said the BLS.
Thomas Gremillion, director of food policy at the Consumer Federation of America, told Fortune that “it’s crazy” that Cal-Maine has been able to turn the current conditions into a situation where they can make a profit.
“You would think that increasing the cost of production for any good would eat into the producer’s profits, and instead we’re seeing the profits increase by orders of magnitude… That is very surprising that they’d be able to take advantage of the situation the way they have,” he said. Cal-Maine did not respond to the outlet’s request for comment.
Fortune noted that egg industry profits have caught the eye of the Department of Justice, which opened a probe into sky-high egg prices back in March. Trump’s administration also announced earlier this year that it would invest $1 billion in bringing down egg prices, and Fortune said that “taxpayers have given $1.25 billion in bird flu compensation,” payments through last November, citing the Federal Register.
Back in February, Audacy station WCCO News Talk even reported that some critics believed giant companies were “taking advantage of their market dominance to profit handsomely at the expense of budget-conscious egg buyers.”
“The bird flu detections have clearly not devastated Cal-Maine,” Gremillion said. “At this point we’re paying a lot of money on [the USDA payment program], and we’re seeing these really big, really powerful companies are getting bigger and more powerful.”
Per a Tuesday press release from the company, Sherman Miller, president and chief executive officer of Cal-Maine Foods, said: “We are proud of our team’s ability to manage our operations and navigate through a very tough environment. We are encouraged by the support of the United States Department of Agriculture (USDA), which recently announced up to $1.0 billion of investments across the industry to address HPAI, including supporting expanded biosecurity measures, regulatory relief for farmers, increased vaccine research and other options to support the domestic egg supply. While these measures will require further study and take time to implement, we believe they represent an important first step toward reaching a more favorable balance of supply and demand.”
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