Farm Action, a nonprofit claiming to advocate for farmers, ranchers and independent processors has become involved in the pricing of eggs. The organization has again, addressed requests to the Federal Trade Commission and the Antitrust Division of the Department of Justice to investigate alleged “monopolization and anticompetitive coordination by large egg producers”. Previously, Farm Action requested action under Section 6 (b) of the Federal Trade Commission Act to investigate price setting systems and marketing practices in the egg industry. No official action was taken, presumably following a review of available facts that refuted the allegations by Farm Action.
Although the nonprofit recognizes the relationship between high egg prices and extensive flock depopulation as a result of highly pathogenic avian influenza, the organization downplays the impact of the disease with the loss of close to 30 million hens in 2025 to date. In a month-to-month comparison using 2021 as the base prior to the emergence of the current epornitic, it is claimed that losses in the egg producing flock attained five percent during 2024. This figure is possibly understated given that USDA has in all probability over-counted flock size. The current producing hen population estimated by the USDA is 293 million or 23 million less than the pre-HPAI population corresponding to a 7.3 percent shortfall.
The letter to the Federal Trade Commission did not consider possible reasons for the extreme price elasticity of eggs. These may relate to distortions created by the prevailing price discovery system that amplifies both the upward and downward trajectory in price resulting from any disturbance in the balance between supply and demand. A second factor may be the magnitude of supply contracts entered into between producers and large retailers that may involve more than half the shell eggs produced. This would result in fluctuation in price as the available but constrained supply of eggs responds to industrial and consumer demand.
Farm Action suggests monopolization and anticompetitive coordination among the dominant firms in the egg supply chain as a reason for high egg prices. The organization specifically cites the position of Cal-Maine Foods responsible for less than 20 percent of national production. If any oligopoly exists in the chain extending from producers to consumers, it is more likely to be at the level of large retailers. Farm Action maintains that egg producers have deliberately restricted production to maintain high prices. This is a fallacy unsupported by available data. The number of hens in production is determined by the supply of day old pullet chicks, livability of rearing and production flocks, molting options and flock depletion. Availability of commercial level chicks depends on the size of parent flocks operated by breeders through their parent multiplier flocks. In 2022 the parent level flock averaged 2.9 million hens decreasing to 2.5 million in 2023 and 2024 with greater efficiency. As a result of the increased demand following the onset of avian influenza the parent hen population increased marginally in 2025 to 2.6 million. It is estimated that this complement of hens using standard parameters, would result in the production of 26.0 million-day-old pullet chicks each month. This theoretical volume corresponds to the actual monthly production of approximately 27-million day-old pullet chicks in 2024. Cal-Maine is fairly unique in that it operates its own parent flocks capable of providing for the replacement requirements of the company. Their parent-level hens are included in the national average as published by the USDA.
If Cal-Maine intended to restrict egg production, the question arises as why it expended in excess of $250 million over three years in expansion and conversion to cage-free housing. In 2024 Cal-Maine purchased a broiler production complex from Tyson Foods that was converted to cage-free table egg production. The level of investment by Cal-Maine foods was probably matched by other progressive producers operating flocks in complexes ranging in size from 500,000 to 3 million hens, based on the sale of housing and other installations for upgrades and new complexes by Rose Acre Farms, Herbruck’s Poultry Ranch, Hickman’s Family Farms, Opal Foods, Hillandale Farms and MPS among others.
Farm Action alleges that high prices are in part due to the absorption of competitors by larger producers. There are a number of reasons why egg producers are acquired. In some cases, there is insufficient capital to replace obsolete equipment or to convert from conventional cages to alternative housing systems. These smaller farms are acquired by larger and more progressive enterprises. In many cases, family ownership with attendant risks and commitment to long hours is unattractive to succeeding generations, prompting sales. In the case of one large 2024 acquisition by Cal-Maine Farms, a foreign-owned enterprise in the U.S. was purchased following the need for the parent company to raise capital by divestment. Irrespective of the reasons for consolidation within the industry, less efficient producers have been displaced but with levels of production increased to achieve economies of scale. The U.S. egg industry over decades has demonstrated cyclic expansion over periods of two to three years. Injudicious expansion previously resulted in periods of financial loss. As the industry has matured, producers independently projected returns from their investment in increased capacity but exercising prudence. Farmers, families and corporations made their own decisions based on projections of demand, escalation in production costs and market realities.
Perhaps the most significant omission from the Farm Action report is neglecting the impact of the egg-processing sector on supply and demand. Approximately 30 percent of all eggs produced are further-processed into liquids and dehydrated products used in baking, food production in for export. The egg-breaking sector has suffered disproportionately from HPAI, resulting in diversion of shell eggs to breaking and thereby reducing supply, especially for uncommitted shell eggs.
Farm Action has diligently assembled data on egg production, prices and demand to accompany their submission. Even with cherry picking and bias in interpretation they have failed to make case for collusion and monopolization. It is anticipated that the Federal Trade Commission and the Antitrust Division of the Department of Justice will accord the February 12th submission by Farm Action the same level of review and come to the same conclusion that the allegations lack merit.