According to the Wall Street Journal on Friday, which cited persons familiar with the matter, the Justice Department has opened an inquiry into the reasons for the increase in egg costs, including whether producers have banded together to boost prices or keep supply out of the market.
As the nation fights a persistent avian flu outbreak, producers such as Vital Farms Inc. (VITL) and Cal-Maine Foods Inc. (CALM), the biggest egg producer in the U.S., have seen their stock prices grow in tandem with their earnings, with prices hovering around $5 for a dozen eggs.
Meanwhile, smaller eateries and restaurant chains like the privately held Waffle House have implemented egg surcharges, making it more difficult for consumers to find a dozen eggs at grocery shops across the country.
The Justice Department’s inquiry is still in its “early stages” and might not result in any official action, the Journal reported. Additionally, the article stated that it was not immediately apparent if the investigation was being conducted by criminal or civil authorities. A spokesman for the Justice Department chose not to comment.
See why the United States is not attempting to vaccine birds against avian flu.
In an emailed statement, the trade association United Egg Producers described the current outbreak as “unlike anything this country has ever experienced.”
Since it began in 2022, bird flu has killed over 130 million birds, and the rate of these deaths has increased, making the issue worse.
“The disruption to the egg-production system from [the bird-flu virus] is single-handedly responsible for the dramatic instability and losses in the nation’s egg supply,” and the illness is “the direct cause of the rapid spikes of egg prices,” according to the trade organization.
“To combat this devastating avian flu pandemic, American egg farmers are exerting every effort. They applaud the administration’s efforts to support this battle and preserve the sector.
As it prepares to bring more family farms online and a new egg-washing and packing plant in Missouri online, Vital Farms stated late last month that while supplies would be more limited early in the year, they should become more plentiful in the second half of 2025.
The effects of the avian flu are becoming more severe, according to United Egg Producers. According to the business, avian flu killed around 31 million egg-layers in January and February alone, and more than 40 million laying chickens were lost in 2024. It further stated that this virus strain is more virulent and that previous outbreaks were neither as broad nor as long-lasting.
“A farm affected by the disease could recover in three to six months in previous epidemics. According to the trade association, it may take over a year for a farm to recover from the present epidemic of this new, more aggressive type. “This is devastating for every egg farm that has been hit, and the number of farms impacted is growing every week.”
However, Friday’s weekly U.S. Department of Agriculture data on egg markets suggested that there might be some respite in the weeks ahead.
The agency reports that the bird-flu outbreak has slowed over the last two weeks, allowing producers in nonaffected areas to catch up, and wholesale prices for loose eggs fell precipitously as demand fell across all sectors.
Grocery shop prices have not yet decreased as a result of the lower wholesale prices. People “have begun to see shell-egg offerings in the dairycase becoming more reliable,” but retail pricing “have yet to adjust and remain off-putting to many,” according to the USDA.
In the last 12 months, the shares of Vital Farms and Cal-Maine have increased by 66% and 51%, respectively, while the S&P 500 index SPX has advanced by roughly 12% during the same time frame.
But so far this year, the equities have underperformed the overall market, with Cal-Maine’s shares down 51% and Vital Farms’ down 12%. This year, the S&P 500 has dropped by almost 2%.
