U.S. DOJ begins investigating reasons behind high egg prices, and bird flu may not be the only culprit

The rise and fall of egg prices from 2015 to 2022. (Federal Reserve St. Louis graphic, Bureau of Labor data)

Bird flu may not be the only driver of historically high egg prices throughout the United States. The Department of Justice "has opened an investigation into the cause of soaring egg prices, including whether large producers have conspired to raise prices or hold back supply," report Dave Michaels and Patrick Thomas of The Wall Street Journal. "The probe comes after prices have doubled over the past year and eggs are sometimes entirely absent from grocery store shelves."

High egg prices can mean more than an expensive omelet or a surcharge on a restaurant's border scramble. Eggs are a surprisingly common ingredient in hundreds of grocery items, which can range from baked goods to salad dressings. When egg prices increase, the overall cost of multiple products increases. 

Industry producers have "attributed high egg prices to the worst outbreak of avian flu in American history. It has resulted in the death of more than 150 million U.S. chickens, turkeys and egg-laying hens since 2022," the Journal reports. Egg producers say they have struggled to reestablish their egg-laying flocks "because even young birds, known as pullets, have been killed by the flu."

Despite spiking prices, many Americans still buy eggs, which can leave the supply chain stressed. "On average shoppers are paying about $5 a dozen, according to the Labor Department," Michaels and Thomas add. "Grocers and food distributors are paying about $8 a dozen at wholesale, which makes selling them often a money-loser."

When consumers pay double for a dozen eggs and grocers still lose money, some egg producers' huge profits may appear irregular. Lisa Phelan, an antitrust partner at Morrison Foerster, told the Journal, "Antitrust authorities often open investigations when high prices appear to stem from unusual disruptions to supply chains."

"Egg producers were losers in one recent lawsuit that alleged they restricted the supply of eggs through a trade association program," Michaels and Thomas explain. "A federal jury in Chicago found in late 2023 that Cal-Maine, Rose Acre Farms, United Egg Producers and U.S. Egg Marketers were liable for restricting supply between 2004 and 2008 through measures such as early slaughter and henhouse density restrictions."