GoKawiilA few days ago, 18 states and the DOJ Antitrust Division signed a series of decrees with three major egg producers, Cal-Maine, Versova, and Hickman’s Egg Ranch, the largest egg producers in the country. The allegation, backed with hard-to-refute evidence including quotes from CEOs, is these entities operated a naked conspiracy to manipulate the price of eggs from 2022-2025. That was exactly the time bird flu on poultry farms was ripping through the supply chain for egg production.
Readers of this site won’t be surprised at this news. Last year, BIG published an investigative series called Hatching a Conspiracy, in which Basel Musharbash discussed what looked like a conspiracy. His argument was that egg producers were using the avian flu crisis as a veil to raise prices. Basically, consolidation had created concentrated power, and the shock of the flu let them exploit it. He highlighted the role of Cal-Maine, the industry’s “bellwether,” as well as the history of antitrust violations in the industry.
While most normal people at the time thought someone was likely scamming them, that is not the message you heard from the industry, elite media, or economists. Throughout the alleged conspiracy, industry executives and analysts were saying that there was nothing to see except a supply shock of a disease killing lots of hens. As one industry executive put it at the time, it’s all just “supply disruption, ‘act of God’ type stuff.”
Economists chortled at the notion of a conspiracy. During the 2024 campaign, when Kamala Harris meekly suggested price gouging to tame inflation, she ran into a buzzsaw of resistance from Democratic-leaning economists, who were openly sneering at her in the New York Times.
“Egg prices went up last year — it’s because there weren’t as many eggs, and it caused more egg production,” said Jason Furman, a Harvard economist formerly in the Obama administration… Mr. Furman said there was a risk that policies meant to curb corporate price gouging could instead keep the economy from adjusting. If prices do not rise in response to strong demand, new companies may not have as much inclination to jump into the market to ramp up supply. “This is not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” he said. “There’s no upside here, and there is some downside.”
Price action seemed to confirm Furman’s view. In 2025, egg prices dropped dramatically, and then further this year, though they are still roughly 40% above where they were in 2019. And these price declines suggested that supply and demand were doing their magical work. Populists were mocked as ignoring natural market forces. Pundit Matt Yglesias called the theory of egg price manipulation “slopulism,” the Cato Institute blogged “Egg Prices Don’t Need to Be Investigated—It’s Just Supply and Demand, and here’s philanthropist John Arnold.
But lo and behold, this complaint has stone cold evidence. It includes many statements from egg producer CEOs emailing and texting one another on how to manipulate prices upward. And it turns out, when they felt threatened by legal action, the alleged price-fixing stopped. Suddenly, the avian flu epidemic was no longer pushing up prices.
To understand what they were doing, we have to start with how egg prices are set.
Egg producers don’t sell eggs to consumers, they sell wholesale to supermarkets, packaged goods companies, restaurants, and so forth. There are two markets for wholesale eggs. Most go via contracts between egg producers and big buyers. For instance, roughly 28% of Cal-Maine’s production is sold to Walmart, through a special supply arrangement. But there’s also an electronic exchange, called the Egg Clearinghouse, for eggs sold in the spot market, aka extra eggs. Egg producers are usually net sellers of eggs, but they have contracts to provide eggs, and sometimes can’t fulfill those contracts through their own production. Other egg producers might have extra eggs. So there is buying and selling of surplus eggs on the Egg Clearinghouse.
As Bloomberg’s Matthew Levine puts it, there’s a small market - the Egg Clearinghouse - and there’s the big market, which are the contracts between buyers and egg producers. Where do the prices for the private buyers and sellers come from? Well, they come from the Egg Clearinghouse. Specifically, a company called Urner Barry looks at prices for different regions based on trades and bids on and off that exchange, their analysts do as best they can to estimate prices across regions, and then they publish a price of where they imagine supply and demand intersect.
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