A major egg producer has been accused of price gouging

Illustration for article titled A major egg producer has been accused of price gouging
Photo: Russel Wasserfall (Getty Images)

We’ve written about pork industry price-fixing, canned tuna industry price-fixing, and now we get to add yet another protein to our list of cost-manipulated foods: the common chicken egg. According to a tweet from the New York Attorney General’s office, Hillandale Farms—one of the largest egg producers in America—is being sued for pandemic-related price gouging.

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In the wake of the announcement The New York Times wrote that “Between January and early March, Hillandale sold eggs to Western Beef at prices ranging from 59 cents to $1.10 a dozen. Then on March 15, two days after President Trump declared a national emergency in response to the coronavirus, the lawsuit says Hillandale increased its price to $1.49.” By the end of March those wholesale prices had risen to an astronomical $2.93 a dozen. Similar price increases were also observed at other stores Hillandale Farms supplied, such as Stop & Shop, where wholesale prices as low as 85 cents a dozen rose to $3.15. And, importantly, the New York Attorney General’s lawsuit alleges that the price increases were not due to the company trying to offset increased costs—it was just about profit.

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While Hillandale Farms has issued a statement saying that there have not been any changes in how they price their eggs, the NY AG’s law suit notes that Hillandale worked with a market research group, Urner Barry, to create a “feedback loop” to justify their price increases. As written by the Times:

“The authorities say the feedback loop worked like this: Hillandale and other egg producers told Urner Barry their assessment of egg prices; Urner Barry used these assessments to create “indexed” prices that it sent to the producers; finally, the egg producers sold eggs at the price set by Urner Barry, citing the index as their method for setting a “fair” price.”

While price gouging is in general a manipulative, harmful practice, this instance seems particularly egregious as it targeted a staple food that forms an important part of the diet of low-income families. In fact, according to the New York Attorney General’s office, the eggs were often sold at grocery stores in low-income communities.

Jacob Dean is a food and travel writer and psychologist based in New York. He likes beer, less traveled airports, and is allergic to grasshoppers (the insect, not the mixed drink.)

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DISCUSSION

Still, even at $3 a dozen to the consumer, that’s 25 cents an egg. So breakfast of two eggs and toast is under a buck. Pretty reasonable.