Sunny Side Up at Triple the Price
This Weeks Wacky Wednesday Sunny Side Up at Triple the Price
In May of 2020, two lawsuits were filed against egg producers in the United States. Each of the cases focused on price gouging, and agree that egg producers used immense price gouging as the first weeks of the COVID-10 pandemic occurred. As The New York Times explained, companies in both Texas and California charged illegally high prices for their products as the coronavirus pandemic began to cause panic buying.
Cooking more at home became a must once stay at home orders were put in place, and, like humans always do, many used the time to do something enjoyable. Baking and cooking (along with the subsequent eating that is the result) became major hobbies. Ingredients disappeared rapidly off store shelves, and while basics like flour, sugar, and salt were quickly in short supply, one essential – the egg – became a major source of frustration…and price inflation.
In the two lawsuits filed, producers were shown to have tripled the cost of a dozen regular eggs, forcing the price to well over three dollars per dozen. In the first, the attorney general for the state of Texas filed a case, and in California, it was a large group of private citizens who took action.
The California suit alleges that the nation’s largest egg producer took in “excessive, unfair, and illegal profits.” Other producers were included in this case, including several major egg wholesalers, the warehouse company Costco, and the food chain Whole Foods. This case has 25 defendants!
Reading the case in the U.S. District Court for the Northern District of California, it is clear that the plaintiffs are disgusted. “As in any time of economic turmoil, there are those who seek to profit from the misery of millions,” they indicate.
What makes both groups so certain price gouging occurred? A look at the cost of this “essential” good before and during the pandemic makes it plain that something unacceptable transpired. For example, in the month of March, the U.S. Department of Agriculture said that large eggs went from $1.01 per dozen to more than $3.05 per dozen. The cost for a dozen eggs in Texas surged to $3.18, with large brown eggs going even higher (at $3.44) by the time April arrived.
In Texas, the plaintiff is Cal-Maine Foods. Though its headquarters are in Mississippi, Ken Paxton (the Texas attorney general) decided to file the complaint once figures showed that same 300% price increase. Wharton County Foods, a subsidiary of Cal-Maine, is also named as they are the company’s agent in Texas.
Can’t companies do what they want? According to state laws, no. California says that 10% price increases are the limit during a time of emergency. For California, that was established March 4. The state of Texas doesn’t have such a clear guideline, but that state went into a state of emergency on March 14 and the lawsuit notes that such a limit should have been in place for essential goods.
Why eggs? As noted, they are an essential for cooking and baking. They are also one of the most affordable sources of protein, and long before any stimulus payments went out or any unemployment benefits were received, they kept millions supplied with key nutrients.
With most Americans eating 293 eggs per year, with many hitting over 400 eggs per year, that works out to billions of eggs per month are consumed in the U.S. Egg producers, the lawsuits claim, took the opportunity to earn one billion and turned that into three billion.
Restitution is sought for all who purchased eggs during the state of emergency, which would mean $5 to $20 for each consumer. It is sad that in such times companies that make billions would triple their profits, but that is how the cookie crumbles (especially when there are no eggs available when the cookies are made!)