‘Big Egg’ Busted! DOJ Settlement Alleges Price Coordination Amid Bird Flu Panic
Settlement involving 3 firms forces egg producers to donate millions of eggs to food banks pay $3.3 million in civil penalties.
When American families were rationing eggs, hunting for cartons at the back of store shelves, and paying north of $8 a dozen at the peak of the price spiral, the nation’s largest egg producers appear to have been quietly coordinating through an industry price-benchmarking service to keep that index and their profits artificially elevated.
Regular readers of Legal Insurrection will recall a 2025 deep dive into whether “Big Egg” was exploiting the bird-flu crisis as cover for something more calculated:
The avian flu outbreak has devastated the poultry industry. Over the past two years, the virus has wiped out millions of egg-laying hens across the United States. The U.S. Department of Agriculture (USDA) estimates that nearly 60 million birds have been culled to prevent the disease from spreading further. This loss in production naturally leads to higher prices—fewer hens mean fewer eggs, and in a market driven by supply and demand, scarcity drives costs upward.
But while bird flu is a legitimate concern, it is far from the only influence. The poultry industry has historically dealt with similar outbreaks without triggering such dramatic price hikes. So what makes this time different?
This week, the U.S. Department of Justice (DOJ) and a coalition of 17 states announced a settlement with three of those producers Cal-Maine Foods, Versova, and Hickman’s Egg Ranch) who will collectively pay $3.3 million in civil penalties and donate 53 million eggs to food banks, while agreeing to end the price-coordination practices.
The egg producers — Cal-Maine Foods, Versova and Hickman’s Egg Ranch — “illegally coordinated” over nearly three years to inflate a daily price index for eggs, the coalition alleged, citing the results of an investigation into egg-price collusion that began more than a year ago.
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The allegations of collusion come amid an affordability crunch among U.S. consumers and as inflation has risen at its fastest pace in more than three years.
Egg prices became a poster child of sorts for high inflation in the aftermath of the Covid-19 pandemic.
In February 2023, for example, average retail prices for a dozen large Grade A eggs had spiked 150% from a year earlier, the largest annual change on record, according to data from the Bureau of Labor Statistics.
The companies must also designate compliance officers to ensure that all aspects of the agreement are carried-out.
The agreements require the companies to cease their illegal conduct and establish safeguards to prevent similar misconduct in the future. Each company must appoint compliance officers responsible for overseeing adherence to their settlement and report any violations to the Office of the Attorney General, the U.S. Department of Justice, and other participating states.
An investigation conducted alongside the Trump Administration’s Department of Justice and several partner states found that the companies conspired to coordinate their bidding activity to influence daily egg price quotes published by Urner Barry, a benchmark pricing service used in egg supply contracts with grocery retailers and the food service industry. In one instance, a Hickman’s executive urged executives at Cal-Maine and Versova to submit aggressive, repeated bids to push prices higher. All three companies then placed numerous, elevated bids, prompting Urner Barry to raise its price quotes. By manipulating this industry benchmark, the companies artificially inflated the cost of eggs paid by Texas consumers.
“I will continue to hold any corporation accountable if they violate our laws to raise prices on Texans,” said Attorney General Paxton. “These three major egg producers conspired to profit off antitrust violations that ultimately raised the prices of eggs for Americans. Now, they will have to donate over 7 million eggs to food banks across Texas. This settlement serves as another reform that we have secured to prevent price gouging and unlawful conduct that hurts Americans and their wallets.”
It turns out that while Americans were told to blame a virus and tighten their belts, some of the biggest players in “Big Egg” were allegedly gaming the system behind the scenes.
The new settlement may close this chapter, but it raises a far larger question about how easily essential food markets can be manipulated under the cover of crisis.
Finally, this development should be a warning shot about pandemic-based excuses for profiteering that arise no matter the virus, whether it’s bird flu, covid, or another type of pathogen.
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Comments
On first read, a 3.3 million dollar settlement, with 3 defendants so figure 1.1 million each, and needing to designate a compliance officer sounds more like a nuisance settlement than any admission of wrongdoing. Am I missing something? Is there any indication that they were colluding, or is this a nuisance settlement as it appears?
That’s the argument made in this substack on monopolies:
https://www.thebignewsletter.com/p/crime-pays-the-egg-bandits-made-a?
$3.3 Million? That’s a LOT of eggs….
Oooh! I hate Big Egg! 🥚
Just kidding.
Let me put it to you this way – governments such as California and Massachusetts have passed *stupid* laws that make *stupid* citizens feel better about crowded hen houses (but do nothing to improve the lives of chickens (not that I give a 💩 about birds as dumb as the citizens of CA & MA) but artificially raise the price of the most affordable source of protein in the supermarket. How’s that for looking after the needs of the poor (hint: D’s don’t give a 💩 about poor people)?
I’m more than willing to give these egg producers the benefit of the doubt in trying to weather the regulatory storm. More than willing…
“and donate 53 million eggs to food banks…”
You could show up with the worst hangover of your entire life, vomiting all over your desk, in the first lecture of Econ 101 and still understand that making farmers donate 53 million eggs is going to raise the price of eggs for the rest of us.
Donald Trump! There are still morons within the federal government that need to be fired!
“making farmers donate 53 million eggs is going to raise the price of eggs for the rest of us.”
According to a recent search – there are more than 100 billion eggs produced domestically each year. That works out to ~275 million per day.. 20% of one day’s production will not affect the overall market price. What it does to the three parties is open for discussion….
“The U.S. produces between 105 and 109 billion eggs each year. This total is divided primarily between table eggs (for consumption) and hatching eggs.”
It would be far jetty if gov’t backed off the regulatory onslaught and allowed consumer choice. The issue would be twofold. First is accurate/truthful labels and advertising. ‘Free range’ doesn’t mean what most people would imagine; chickens can be called free range if they have the door open …but if the feed/water/shade is all in that big metal chicken house they ain’t gonna go anywhere for the same reason people sit inside in the AC on the couch with a TV remote, a bag of cheesy-poofs and a Dr Pepper, it’s comfortable. Gotta get labeling to reflect the reality instead of deceptive industry written regs. Second is the people problem. If you wanna buy oysters and whole milk out of the some shifty looking
guy’s trunk at roadside rest stop in Nebraska ….it’s fine with me but I suspect too many people will object to allowing others the freedom to make bad choices. Like buying gas station sushi at midnight in Odessa TX …maybe that sushi was made on site/locally from fresh fish trucked up from the Gulf this evening …but odds are it wasn’t. Still, we should give the consumer the ability to make informed decisions with better/more accurate labeling and if they still choose to buy from Shifty Bob’s trunk then let an actual free market control the outcome.
A hard boiled shell game to eggsact outrageous prices from the yokels. They should be pun-ished as common poachers before they scramble.
Well done!
Now they have egg on their faces.
Pubs like that have audiences scrambling for the egg-sits. Is that the baste you can do?
Puns. My typing fingers have a head cold.
Idiotic. The market takes care of it. People with eggs when there’s an egg shortage make lots of profits, but those profits are what spur people without eggs to get eggs to sell, which is what ends the shortage.
Please listen to the very entertaining econtalk episode on price gouging when a hurricane came through and bags of ice went (illegally) for $20.
They shut that down really fast and there was no more ice at any price.
Nobody enticed to bring in ice from outside.
Say you want to cool insulin. Tough luck.
I promise it’s entertaining and worth the listen
https://www.youtube.com/watch?v=8_z-GnhHyGg
Culling = murdering
Oh, come on!
No way! I was repeatedly assured that this sort collision to artificially raise prices, harm consumers and squelch competition doesn’t happen in our ‘free market’. /s
More collisions like that will wreck their business!
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Very nice. With apologies to Bobby Boucher’s Mama, autocorrect is the devil.
California’s chicken welfare laws put their own egg producers at a disadvantage to out-of-state producers not encumbered by similar laws in their own states. So California made a law that required all eggs sold in the state, regardless of where they were produced, to come from chickens kept under the same conditions as those in California.
Prevention of this sort of protectionism by States is exactly why Congress was given exclusive legislative jurisdiction over interstate commerce. (To say nothing of the effective extension of one State’s authority to regulate businesses into the jurisdiction of other States, affecting producers in those States as well as within its own borders.)
Agreed. Each State should be able to regulate for direct safety of the product itself; if used as intended it won’t harm the consumer. They should not be able to regulate production means/methods nor the non direct safety concerns for products produced outside their State. If a State wants to regulate auto emissions they should be free to do so for every vehicle manufactured and sold in their State but not those built elsewhere nor those built in their State but exported to other States.
What would Vincent Price, of Egghead fame, have to say?
During the high point of the great egg shortage here in Wisconsin, I was still able to get as many as I wanted, locally sourced, for $3 a dozen. Normally they would have sold for $1.50 to $2.00 a dozen. Were some people taking advantage of the market prices and adjusting theirs for a modest profit? Sure, but most producers around here weren’t price gouging, they were just working within the basic rules of capitalism and the free enterprise system. The large chain grocery stores? Well that’s a whole different story.
Can I just say once again that 60 million birds were NOT killed by avian flu
60 million egg layers were killed by government policies to murder healthy birds and prevent any possibility of developing natural immunity to an admittedly significant disease.
This was a disease threat that could have been dealt with on the farm by simple and common sense biosafety protocols. That it was not had more to do with Big Poultry’s reliance on ignorant illegal labor than the difficulty in getting a handle on this disease.
My personal experience with a large flock was that the flu had about a 7% mortality rate and the rest of the flock were subsequently immune to a disease which is endemic in our local waterfowl.
Very strange!
Yesterday, I posted a comment here about Hickman’s Egg Ranch, its owner’s incumbency (and chairmanship) on the Maricopa County Board of Supervisors, and a report that a fire at the ranch was conveniently timed hours after a subpoena demanding documentary material from one of those “elections” that the Maricopa BOS ran so competently and verifiably over the past several years. Nothing overtly libelous about it that I could see.
Today, there’s not a trace of that comment anywhere.
During the Biden administration, it seems everyone was in on the grift.