The rise in egg prices prompts the senator to call for an investigation into price gouging

Senator Jack Reed on Monday asked the Federal Trade Commission to open an investigation into “potential price gouging and other fraudulent practices” as egg prices have skyrocketed.

The Rhode Island Democrat, in a letter to agency chair Lina Khan, noted that the price of a dozen eggs rose 138% in December compared to the same time last year, citing data from the Bureau of Labor Statistics .

Egg prices rose to $4.25 in December from $1.79 in the same period in 2021, a 138% increase, according to data from the Bureau of Labor Statistics.

The rise in egg prices has been attributed to the millions of chickens being slaughtered to stem the spread of bird flu and farmers trying to offset inflation that is driving up their costs.

The largest U.S. egg producer, Cal-Maine Foods, was singled out by Reed for reporting last month that its quarterly sales rose 110% to $801.7 million against record egg prices, helping it achieve a Earning $198.6 million from $1.1 million a year earlier.

US FARM GROUP DEMANDS INVESTIGATION OF HIGH EGG PRICES

Senator Jack Reed

Senator Jack Reed speaks on the phone as he exits a closed lunch with Senate Democrats in the US Capitol on January 24, 2023. (Drew Angerer/Getty Images/Getty Images)

‚ÄúConsumers are used to seeing some volatility in the egg price market, but the current price spike in favor of the industry warrants careful scrutiny. Independent federal regulators should look at the facts and follow the evidence to ensure consumers are treated fairly,” he said in the letter to the FTC. Reed noted that the Department of Agriculture had determined that the price increase in this sector was “much greater than the drop in production caused by avian influenza.”

Although around 43 million of the 58 million birds slaughtered last year to fight the flu were egg-laying hens, at any point in time the overall flock size is down only 5 to 6% from its normal size of around 320 million hens.

A woman buys eggs

Egg shelves with an apology note to customers for the price increase are seen in San Mateo, California on January 23, 2023. (Tayfun Coskun/Anadolu Agency via Getty Images/Getty Images)

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“At a time when food prices are high and many Americans are struggling to afford their groceries, we need to examine the industry’s role in maintaining high prices and hold those responsible accountable for their actions,” Reed wrote.

A farmer-led advocacy group called Farm Action made a similar request last week. She argued that there appears to be “a secret scheme between industry leaders to turn inflationary conditions and an avian flu outbreak into an opportunity for monstrous gains.”

Cal-Maine Foods told FOX Business in a statement that it “wants to reassure its customers that we are doing everything we can to maximize production and keep shelves stocked” and that the “home egg market has always been competitive, and even under-performing very volatile was normal market conditions.”

Eggs at a Michigan grocery store

Eggs for sale at a grocery store in Detroit, Michigan on January 18, 2023. (Matthew Hatcher/Bloomberg via Getty Images/Getty Images)

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The prices the Mississippi-based company charges are set through negotiation with the grocery chains, club stores and retailers to which it sells.

Cal-Maine said its prices averaged $2.71 per dozen last quarter. That’s nearly double the $1.37 it fetched a year earlier, but still lower than the prices consumers are paying.

The Associated Press contributed to this report.

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