MW High egg prices are getting the DOJ's attention. Will that help consumers?

By Claudia Assis

Bird flu 'is single-handedly responsible for the dramatic instability' in egg supplies, trade group says

The Justice Department has launched an investigation into the causes of rising egg prices, including whether producers have colluded to raise prices or keep supply out of the market, the Wall Street Journal reported Friday, citing people familiar with the issue.

Producers like Cal-Maine Foods Inc. (CALM), the largest U.S. egg producer, and Vital Farms Inc. $(VITL)$ have seen profits rise alongside their stock prices as the country battles an ongoing outbreak of bird flu and prices hover at around $5 for a dozen eggs.

Meanwhile, restaurant chains such as privately held Waffle House and smaller restaurants have put egg surcharges in place, and scoring a dozen eggs at grocery stores across the nation is increasingly a strike of luck for shoppers.

According to the Journal, the Justice Department's investigation is still in its "early stages" and may not lead to any formal action. The report also said that it wasn't immediately clear whether the probe is under the direction of civil or criminal authorities. A Justice Department spokesperson declined to comment.

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The United Egg Producers, a trade group, said in an emailed statement that the current outbreak is "unlike anything this country has ever experienced."

Bird flu has caused the death of more than 130 million birds since it started in 2022, and the pace of those losses has accelerated, compounding the problem.

"The disruption to the egg-production system from [the bird-flu virus] is single-handedly responsible for the dramatic instability and losses in the nation's egg supply," and the virus is "the direct cause of the rapid spikes of egg prices," the trade group said.

"America's egg farmers are doing everything they can to fight back against this deadly bird-flu outbreak. They welcome the efforts of this administration to help in this fight and save the industry."

Vital Farms said late last month that supplies would be tighter earlier in the year, but that the constraints were expected to ease in the second half of 2025 as it plans to have new family farms coming online and a new egg-washing and packing facility in Missouri.

United Egg Producers pointed out that the bird flu's impact is getting more severe. The industry has lost more than 40 million laying hens in 2024, and in January and February alone, nearly 31 million egg-layers have been killed because of bird flu, it said. Past outbreaks didn't last as long nor were as widespread, and this virus strain is more virulent, it added.

"In past outbreaks, a farm hit with the disease could recover in three to six months. In the current outbreak of this new, more virulent strain, the recovery process for a farm as required under law can take more than a year," the trade group said. "This is devastating for every egg farm that has been hit, and the number of farms impacted is growing every week."

Shares of Vital Farms and Cal-Maine have gained 66% and 51% in the past 12 months, compared with an advance of about 12% for the S&P 500 index SPX in the same period.

The stocks have underperformed the broader index so far this year, however, with Vital Farms shares down 12% and Cal-Maine shares down 51%. The S&P 500 has fallen nearly 2% this year.

-Claudia Assis

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March 07, 2025 18:07 ET (23:07 GMT)

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