By Mark Sumner for Daily Kos
On Tuesday, a federal jury in Illinois concluded that along with two egg industry trade groups, two of the nation’s largest egg producers conspired to restrict the availability of eggs and drive up prices. Across social media, the jury finding was immediately connected to a huge spike in the price of eggs beginning in the fall of 2022.
However, the truth of the story is more complicated than headlines may suggest. As Bloomberg Law reports, food companies began complaining about the price-fixing scheme all the way back in 2011. What’s more, the scheme was seemingly put in place in the 1990s, if not sooner.
The story about the price-fixing of eggs turns out to not be so much about how food producers conspired to drive up prices at a time when the nation was struggling from the lingering effects of a pandemic. It’s a story about how food industry groups and corporate producers are always looking for ways to cheat the system.
According to the American Farm Bureau, the cost of Thanksgiving dinner is down by 4.5% compared with 2022. However, it’s up by 25% when compared with 2019. How much of that is simply corporate greed? A lot more than the national media wants to admit.
Here’s a chart from the U.S. Bureau of Labor Statistics looking at the prices of some common food items earlier this year.
Egg prices doubled in a month. When Thanksgiving rolled around last year, shoppers found that a dozen eggs cost almost three times as much as they had in the spring. That’s the kind of increase that media outlets—which seemed poised to deliver dire stories about inflation, even if it meant finding a family that buys 12 gallons of milk each week to use as an example—were dying to highlight. And they did.
Whether it came from The Wall Street Journal, CNBC, or PBS, the message and the treatment were the same: numbers showing how egg prices are up, a story of some family or small restaurant owner hurt by rising costs, and an explanation that “eggflation” was caused by an outbreak of avian flu that had killed millions of chickens. The flu problem was real. However, so were the artificial shortages and price gouging among producers that had not been heavily affected by the flu.
As a March 2023 story from CNN notes, the nation’s largest egg producer, Cal-Maine Foods, reported a 200% increase in revenues and an astounding 718% jump in profits for the previous quarter “because of sharply higher egg prices.”
Cal-Maine controls about 20% of the U.S. market for eggs. As CNN reported, not only had the company doubled the price of its eggs, it also sold more eggs than it did in the previous year. It’s hard to find evidence of an actual shortage. What’s more, in its December 2022 quarterly report, Cal-Maine indicated that “no bird flu had been detected at any of its facilities.”
The nation’s largest provider saw no bird flu. It sold more eggs than in 2021. But it more than doubled its price while scoring an incredible spike in profit. That certainly makes it seem like avian flu—which was a real thing that really did affect poultry production around the world—was used as an excuse to jack up prices to completely inexcusable levels.
Unsurprisingly, Cal-Maine is one of the two companies involved in the jury finding on Tuesday.
When it’s all put together, what it shows is an industry that has been manipulating the market for seemingly three decades or more, and that took advantage of both a real disease and media hype about inflation to disguise a naked grab for record profits.
Eggs have long been one of the cheapest forms of protein available to consumers. They are critical to the diet of many low-income individuals and families. As this Lifehacker article pointed out during the 2022-2023 price spike, eggs deliver 20 grams of protein for just 48 cents when eggs cost $2.00 a carton. But drive the cost of those eggs up 280% and the cost per gram moves above milk, tuna, and even chicken. A traditionally cheap and versatile protein source becomes one of the most expensive.
Corporate greed and the desire to make a quick buck always play a role in inflation. However, the price increases over the last few years are unique when it comes to “greedflation.” In 2021, 60% of inflation could be attributed not to increases in cost of raw materials or increasing wages for labor, but to increases in corporate profits.
But somehow, The New York Times is still discussing inflation as if it’s a symptom of a need to “cool the economy” by jacking up interest rates. Naturally, the words “profit” or “greed” don’t appear in this story. The Associated Press reports that Americans “feel gloomy” about the economy, which economists attribute to “lingering financial and psychological effects of the worst bout of inflation in four decades.” That article also doesn’t mention corporate profits or greed, but it does have a story about a single mom who has had to cut back on food for her children.
Government agencies are showing that the biggest source of inflation is corporations reaching for record profits. The nation’s largest media outlets are not reporting this story with the magnitude it deserves. However, the AP article does note that this is a problem … for President Joe Biden.
Inflation caused by corporate greed can’t be addressed by raising interest rates that harm consumers. Solving the underlying problem can’t be done until the public is fully aware of the real cause of rising prices.
Bur corporate media is failing them on this issue, as it is on so many others.
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