No, Corporate Greed Didn’t Cause the 2023 Egg Price Shock

“An avian flu outbreak devastated the poultry industry throughout 2022. By the end of the year, according to the U.S. Department of Agriculture (USDA), there were 43 million fewer egg-laying hens than in February 2022. Egg inventories fell 29 percent from January to December. When demand outstrips supply, prices go up.
A similar outbreak in late 2014 affected more than 50 million birds. According to Fed data, egg prices rose from $1.96 a dozen in May 2015 to $2.96 in September 2015 before falling for more than a year afterward.

The 2022 outbreak, by contrast, persisted into 2023. At the same time, general inflation was unusually high: 6.5 percent in 2022, compared to 0.7 percent in 2015. “Like consumers,” the American Feed Industry Association noted in January 2023, “feed manufacturers are feeling the effects of inflation on the economy and are paying increased rates for energy, shipping, labor and ingredients.” So even as the number of hens dropped, the cost of feeding them rose.

The good news is that egg prices began falling after January’s high. Average egg prices fell from $4.82 a dozen in January to $4.21 in February and $3.45 in March. The USDA predicted that, barring an avian flu resurgence, prices would continue to fall throughout the year.”

The real reason prices aren’t coming down

“The thing about excuseflation is it’s sort of grounded in truth. It’s the idea that companies are using these once-in-a-lifetime disruptions. Think about the supply chain hiccups that we’ve had. Think about the Ukraine-Russia war. And they’re using those one-off disruptions as an excuse to raise prices. And that sounds fair enough. You know, companies, they have expenses. If their input costs go up, maybe it makes sense for them to pass some of those on to customers. But where it starts to become insidious is when they’re raising prices so much that they’re seeing their profits go up quite substantially as well.”

“Sure. So one of my favorite examples, because, you know, I love these personally, but chicken wings. Let’s talk about chicken wings and Wingstop. Wingstop is a very large purveyor of very delicious chicken wings. And what they’ve been saying on their earnings calls is that they have been raising their prices for their delicious chicken wings. And the reason they’ve been doing that is because the wholesale cost of your basic chicken wing went up quite a lot during the pandemic. We had a lot of disruptions at various farms, chicken farms with labor shortages and things like that. So it made sense that chicken wing prices went up and the company started passing those on to consumers.

The issue now, though, is that we have seen a substantial drop in chicken wing prices. And yet the company isn’t saying that it’s going to start dropping its prices. What it’s discovered, much like a lot of other businesses at the moment, is that actually this strategy of making up what you lose in sales volume with higher prices, so you’re selling fewer products, but you’re selling them at higher prices, [is] a viable strategy in the current environment, and it’s working for a lot of companies because profit margins are up.”

“baker in Chicago kind of laid it out for us. He said: “Whether it’s rye flour or bird flu, that impacts eggs when it makes national news just running a business, it’s an opportunity to increase the prices without getting a whole bunch of complaining from the customers. It’s not that we’re out there price gouging, but, you know, timing can be everything.””

“think about the reason that we tend not to like monopolies as consumers. We want, you know, a vibrant landscape of lots of smaller businesses that are all competing with each other so that we get a better value for our money. What happens when you have an industry-wide event that gives a group of businesses an excuse to raise prices: They are all effectively, not officially, but effectively acting as a monopoly. They can all say, well, you know, it’s bird flu, so we’re all going to raise the prices of our eggs.”

Robert Reich Is Wrong: ‘Corporate Greed’ Isn’t To Blame for Egg Prices

“A widespread avian flu outbreak devastated the poultry industry in 2022, causing the deaths of more than 43 million hens. December egg inventories were down nearly 30 percent from the year before, just in time for the holiday baking season. Under the basic rules of economics, a persistent drop in supply leading into a time of increased demand is bound to have this result.”

How chicken plants became more dangerous places to work than coal mines

“because chickens and pigs (and cows and lambs and turkeys … ) are living things whose shapes and sizes vary, cutting and pulling breast meat from chickens, for example, can’t be done with machines or robots. It has to be done by human beings, and to achieve the output that slaughterhouses and meatpacking plants want, it has to be done quickly.

The plants’ practice of placing workers shoulder to shoulder, while doing exhausting work that leads to heavy breathing, has made them epicenters for the coronavirus outbreak this year. The Trump administration has tried to keep the mostly low-income workers in these plants working all the same out of fear of a “meat shortage,” putting the workers at considerable risk.

That’s hardly the only risk, however, that workers in these plants face. According to the Bureau of Labor Statistics, workers in animal slaughter and production face higher rates of injury than coal miners or construction workers. Poultry processing in particular is the leading occupational cause of finger amputations in the US.”