DOJ Scrutiny on Egg Producers: Setting the Stage for Potential Legal Challenges

Egg prices hit an all-time high of $4.95 per dozen in January 2025. Major egg producers now face intense scrutiny over possible price fixing. 

Producers blame the avian flu crisis that has impacted over 160 million commercial poultry since 2022. However, the dramatic surge in wholesale market prices has raised red flags about market manipulation, especially after a 2023 $17.7 million jury verdict had already found that major egg producers drove up prices by limiting supply intentionally.

Questions still linger about pricing practices, especially since the top five producers control about half of the U.S. egg supply. These developments have prompted the Department of Justice (DOJ) to investigate possible antitrust violations in the egg industry. 

Our analysis examines the DOJ investigation and explores the factors contributing to the price surge. It considers evidence from a range of perspectives, including the implications of previous price-fixing cases, to shed light on what these developments might mean for the future of the egg industry.

Understanding the DOJ Investigation

The Department of Justice has started a civil investigation into major egg producers to address concerns about market manipulation. The antitrust division's Chicago office leads this probe, with industry giants like Cal-Maine Foods and Rose Acre Farms under scrutiny.

What triggered the investigation

Heightened by consumer complaints, price increases, and a massive jump in profits for egg producers, several efforts were made to demand further investigations on egg pricing and possible monopolization, among these efforts were Farm Action, an advocacy group fighting corporate monopolies, pushed federal regulators into action with their February 12th letter. They raised red flags about possible monopolization and anticompetitive coordination in the industry. 

Federal Trade Commissioner Alvaro Bedoya also urged the FTC Chair to look into egg industry's pricing practices as Americans struggle with rising living costs.

Scope of the inquiry

The DOJ's investigation is still in early stages and not much has been revealed, however, many publications report that the investigation is aimed at knowing if companies share sensitive information about pricing and supply mechanisms. 

The probe also looks at whether producers have limited supply to drive up prices. DOJ lawyers are getting ready with civil investigative demands - which serve as subpoenas for civil investigations.

Key players under scrutiny

The investigation targets these major industry players:

• Cal-Maine Foods: The nation's biggest egg producer stands out after reporting a 342% increase in gross profits through the second quarter of fiscal 2025 compared to last year.
• Rose Acre Farms: Another major producer caught in the investigation's spotlight.

The Price Surge Analysis

U.S. consumers are facing sky-high egg prices at grocery stores across the country. The average price for a dozen Grade A eggs hit $4.95 in January 2025, setting a new record high.

Companies blamed avian flu for the price increases, but the numbers tell a different story. The national flock shrank by just 3.82% in 2022, 3.16% in 2023, and 5.18% in 2024 compared to 2021. The retail egg prices shot up by 157%. These numbers show a gap between actual supply issues and price increases.

Supply manipulation patterns

The data reveals some concerning trends in supply management:

• Annual egg production for Cal-Maine stayed steady at about 1.1 billion dozen eggs from 2021 to 2024.
• Producers made more eggs in 2022 and 2023 than in 2021.
• National retail inventories from April to December 2023 were up to 13% higher than the five-year average.

Industry consolidation impact

The egg industry's concentrated nature blocks new market entries and price competition. According to Farm Action, two private European corporations now control about 90% of the world's egg-layer hen breeding. This market structure has changed how the industry handles supply disruptions compared to previous outbreaks.

The 2015 avian flu outbreak offers a telling comparison. Back then, national flock numbers bounced back within eight months. Today's recovery lags behind, even though Cal-Maine Foods reported no bird flu outbreaks in their flocks during fiscal year 2023. The big producers used their extra profits to buy more companies instead of growing their flocks.

Multiple publications reported that the pricing system raises red flags. Some noted that buyers depend heavily on one company, Urner Barry (Expana), for data analytics and that their indices create a feedback loop that might drive artificial price increases. 

This relationship between producers and chain buyers, built on a single commercial price discovery system, could stand in the way of true market freedom. This was explored in 2020 by New York Attorney General Letitia James as she expressed similar concerns in a lawsuit against Hillandale Farms, alleging that during the COVID-19 pandemic, the company exploited these indices to justify exorbitant prices.

Effect on consumers

These price hikes are taking a toll on family budgets. Families buying a dozen eggs weekly now spend nearly $300 yearly. So stores have taken unusual steps:

• Walmart lets customers buy only two 60-count cartons.
• Kroger's stores set a limit of two dozen eggs per visit.
• Waffle House adds 50 cents extra per egg.

Retailers have had to change their usual pricing approach. They used to sell eggs below wholesale costs to draw customers. But supply shortages now force them to keep prices high to avoid running out of stock.

Industry Defense Arguments

Egg producers defend their pricing strategies as they face increased public attention. They point to never-before-seen challenges in the industry. American Egg Board president Emily Metz stresses that producers remain "price takers, not price makers" while the market deals with multiple disruptions.

Avian flu impact

The highly pathogenic avian influenza (HPAI) has wreaked havoc on commercial flocks. This resulted in 30.3 million birds being lost in 2025 alone. Different production systems show varying levels of impact:

• 74% of losses occurred in conventional caged systems.
• 26% in cage-free systems.
• 0.1% in organic flocks.

Market forces argument

The industry presents clear economic reasons for price increases:

• Feed costs make up 60-70% of egg production expenses.
• Retail markups usually add 20-30% to wholesale prices.^]
• Egg supply stays highly inelastic short-term, so production can't quickly adjust to meet needs.

Supply chain disruption

Producers have gathered proof of real supply constraints. The USDA confirms that replacing lost flocks takes considerable time, about six months from hatching to egg production. United Egg Producers' CEO Chad Gregory notes that stricter regulations now push recovery time beyond a year.

The defense strategy also shows unprecedented investments in biosecurity. The USDA's recent $500 million allocation for improved biosecurity measures shows the real costs producers face. Protected facilities prove their worth, all but one of 150 facilities with detailed biosecurity protocols avoided outbreaks.

American Egg Board's CEO Emily Metz adds another vital defense point. She describes "a perfect storm of circumstances" where extreme weather changed migratory bird patterns and increased avian flu risks. 

The strength of these defense strategies will be tested against growing evidence of possible market manipulation as the case moves forward.

Future of Egg Pricing Litigation

The egg industry faces a complex situation with market changes and possible anticompetitive behavior. Producers blame avian flu and higher costs, but the DOJ investigation points to market manipulation concerns. This investigation could lead to more civil lawsuits, especially when businesses buy eggs directly from major producers. 

Plaintiff firms see promising opportunities in the DOJ investigation. They can build strong antitrust claims based on supply manipulation and unusual price hikes that happened even when production stayed steady. Defense teams need reliable strategies that go beyond just citing avian flu, this becomes even more critical given organizations challenging this defense.

Nobody knows what the egg market will look like next. Producers try to rebuild their flocks and fix supply issues, but prices keep rising. Market instability will likely continue until the DOJ finishes its investigation and supply chains return to normal.

As antitrust scrutiny intensifies in the DOJ's investigation of egg pricing practices, understanding evolving litigation trends is crucial. Whether you're representing plaintiffs or the industry, our platform offers insightful analysis to help you navigate these complex cases. Discover how Rain Intelligence can sharpen your competitive edge.

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