Senator Padilla Calls for Investigation into Price Fixing by Major Egg Distributors
SACRAMENTO – Last week, Senator Steve Padilla (D-San Diego) joined by several Senate colleagues, issued a letter (attached) to California Attorney General Rob Bonta, requesting the California Department of Justice investigate alleged profiteering and price fixing by major egg distributors in the midst of a dangerous avian flu outbreak.
Beginning in early 2022, the current outbreak of avian influenza in the US forced egg farmers to cull more than 100 million hens, slowing egg production. In response to this, the US Department of Agriculture has dispersed millions of dollars in aid to facilities that had to slaughter hen stock after an influenza outbreak. Last month, U.S. Secretary of Agriculture Brooke Rollins announced the Agriculture Department would increase the amount egg distributors are compensated per hen slaughtered by 241% to $16.94. During this period, egg prices have risen to record highs and only continue to climb.
While accepting millions in taxpayer subsidies, Mississippi-based Cal-Maine, the nation’s largest egg distributor, reported $509 million in quarterly profits. This represents more than triple the amount the company made in the same period just a year ago, and over eight times its profits at the beginning of the avian flu outbreak in early 2022. In 2021, Cal-Maine’s quarterly profits averaged around $5 million, but over the last four quarters, those profits have averaged closer to $170 million dollars.
According to the Bureau of Labor Statistics, the average price for a dozen eggs in February of 2024 was $3.00. In March of this year, that cost was $6.23, the highest egg prices have ever been. In the past, these price increases were blamed on egg production slowing after flu outbreaks, however, in 2023, Cal-Maine did not experience any avian flu outbreaks in its flocks –yet in the same year, the company sold a dozen eggs at close to triple the price as it did in 2021.
“American taxpayers have paid millions in subsidies to these massive companies, a benefit small businesses do not enjoy, while the corporations have dramatically raised egg prices,” said Senator Padilla. “Families across our state are faced with difficult financial decisions as the President’s erratic trade policies cause further market instability – we cannot allow corporations to pad their bottom line with our tax dollars while the average American pinches pennies.”
Recently, Farm Action, a farmer-led advocacy organization, filed a complaint with the Antitrust Division with the US Department of Justice alleging that Cal-Maine and other major egg distributors have colluded to artificially raising prices for consumers while blaming flu outbreaks. This week, Cal-Maine announced that the DOJ has begun to investigate their practices as a potential price gouging case.
In the letter, Senator Padilla urged Attorney General Bonta to direct the California Department of Justice to conduct its own investigation into these practices to determine how this company and other distributors can report record profit while still holding out a hand to American taxpayers.
Senator Padilla was joined by several Senators and advocates in their calls for an investigation:
“At a time when food insecurity is on the rise, it is alarming to see egg distributors reap record profits while enjoying government subsidies at the expense of taxpayers,” said Senator Jesse Arreguín. “Consumers deserve to know the root causes of these price hikes, which is why I am joining the call to have the Attorney General investigate this matter and hold violators accountable.”
“California families should be able to shop with confidence knowing they are paying a fair price for a product even during a crisis,” said Senator Sasha Renée Pérez (D – Pasadena). That's where price gouging laws are supposed to protect consumers. During the avian flu outbreak, family budgets were hit hard as egg prices soared. Given the massive profits earned by egg distributors during the crisis, I call on the state Attorney General to investigate whether Californians were taken advantage of by egg producers.”
“Corporate greed is contributing to sky high egg prices,” said Amanda Starbuck, Research Director at Food & Water Watch, which recently released a study into corporate influence on egg prices. “While Americans struggle to put food on the table, Big Ag is raking in billions, using the bird flu crisis as cover to reap record high profits. Our research finds that the nation’s largest egg corporations have used this crisis to spike prices and reap tremendous profits at consumer expense. Lowering egg prices will require taking on these food monopolies. California Attorney General Rob Bonta must investigate corporate profiteering and price fixing.”
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Steve Padilla represents the 18th Senate District, which includes the communities of Chula Vista, the Coachella Valley, Imperial Beach, the Imperial Valley, National City, and San Diego. Prior to his election to the Senate in 2022, Senator Padilla was the first person of color ever elected to city office in Chula Vista, the first Latino Mayor, and the first openly LGBT person to serve or be elected to city office. Website of Senator Steve Padilla: https://sd18.senate.ca.gov/