Summary
Major egg corporations may be using avian flu as a ruse to hike up prices, generating record profits while hurting American consumers, new research suggests.
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Egg prices soared to nearly $5 a dozen, rising 157% since before the avian flu outbreak, despite only a 9% drop in laying hens.
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Cal-Maine, controlling 20% of the US market, saw a sevenfold profit increase in 2023 compared to 2021.
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Over 166 million poultry have been culled, but critics say consolidation and slow flock replacement may inflate prices beyond the virus’s 12-24% direct cost.
Lawmakers urge investigations, while the Trump administration plans vaccines, reduced culling, and a $1bn avian flu fund to help stabilize costs.
Claiming that a 157% price hike cannot be explained by a 9% drop in supply is just bad economics. If everybody just buys the eggs anyway the price can rise arbitrarily high.
Profits increasing on the short term is very plausible as costs don’t rise from having some hens die, but supply drops. This is over compensated with price increases.