Egg prices soared to historically high levels in 2022 — and one group is alleging the trend is due to something more nefarious than simple economics.

Across all egg types, consumers saw average prices jump 60% last year — among the largest percentage increases of any U.S. good or service, according to the consumer price index, an inflation measure.

Large, Grade A eggs cost $4.25 a dozen in December, on average — a 138% increase from $1.79 a year earlier, according to U.S. Bureau of Labor Statistics data.

The industry narrative has largely focused on a historic outbreak of avian influenza — which has killed tens of millions of egg-laying hens — as the primary driver of those higher prices.

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But Farm Action, a farmer-led advocacy group, claims the “real culprit” is a “collusive scheme” among major egg producers to fix and gouge prices, the group said in a letter to the Federal Trade Commission.

Doing so has helped producers “extract egregious profits reaching as high as 40%,” according to the letter, issued Thursday, which asks FTC Chair Lina Khan to investigate for potential profiteering and “foul play.”

An FTC spokesman declined to comment due to a general agency policy regarding letters, petitions or complaints received from third parties.

However, food economists are skeptical an inquiry would uncover wrongdoing.

“I don’t think we’ve seen anything that makes us think that there’s something there other than normal economics happening right now,” said Amy Smith, vice president at Advanced Economic Solutions.

“I think it was just kind of a perfect storm of stuff that came together,” she added.

The U.S. suffered its deadliest outbreak of bird flu in history in 2022.

“Highly pathogenic avian influenza” killed about 58 million birds across 47 states, according to the U.S. Department of Agriculture. The prior record was set in 2015, when 50.5 million birds died.  

The disease, which is contagious and lethal, affects many types of birds, including egg-laying hens.

In December, the average number of “layers” was down 5% from a year earlier, at a total 374 million birds, according to USDA data published Friday. Overall production of table eggs fell by 6.6% over the same period, to 652.2 million, data showed.

These industry figures don’t seem to square with a two- or three-digit percentage spike in egg prices last year, Farm Action claims.

“Contrary to industry narratives, the increase in the price of eggs has not been an ‘Act of God‘ — it has been simple profiteering,” the group said.

For example, the profits of Cal-Maine Foods — the nation’s largest egg producer and an industry bellwether — “increased in lockstep with rising egg prices through every quarter of the year,” Farm Action claimed. The company reported a tenfold increase in profits over the 26-week period ended Nov. 26, for example, Farm Action said.

While other major producers don’t report such information publicly, “Cal-Maine’s willingness to increase its prices — and profit margins — to such unprecedented levels suggests foul play,” Farm Action wrote.

Max Bowman, Cal-Maine’s vice president and chief financial officer, denied the allegations, calling the U.S. egg market “intensely competitive and highly volatile even under normal circumstances.”

Bird flu’s significant impact on hen supply has been the most notable driver, while egg demand has remained strong, Bowman said in a written statement.

Expenses for feed, labor, fuel and packaging have also “risen considerably,” feeding through to higher overall production costs and, ultimately, wholesale and retail egg prices, he said. Cal-Maine also doesn’t sell eggs directly to consumers or set retail prices, Bowman added.

Cal-Maine’s statement seems to square with the general outlook of food economists reached by CNBC.

“We’ve never seen [these prices],” said Angel Rubio, senior analyst at Urner Barry, a market research firm specializing in the wholesale food industry. “But we also haven’t seen [avian flu] outbreaks month after month after month like this.”

In economics, markets are almost never perfectly “elastic,” Rubio said. In this case, that means there’s generally not a 1:1 relationship between egg or hen supply and egg prices.

During the prior bird-flu outbreak in 2015, wholesale egg prices rose about 6% to 8% for every 1% decrease in the number of egg-laying hens, on average, Urner Barry found in a recent analysis.

About 42.5 million layers (about 13%) have died since the 2022 outbreak, according to Urner Barry. Prices have increased about 15% for every 1% decrease in egg layers over that time, on average, Rubio said.

The dynamic is largely due to a “compounding effect” of demand, Rubio said.

For example, let’s say a big supermarket chain has a contract to buy eggs from a producer at a wholesale price of $1 per dozen. But that egg supplier then suffers a bird-flu outbreak. All supply from that source comes offline temporarily. So, the supermarket chain must then procure eggs from another supplier — raising demand for the other supplier’s eggs, which might ultimately sell eggs to the supermarket for $1.05 or more a dozen.

Once a farm suffers a flu outbreak, it likely won’t produce eggs again for at least six months, Rubio said.

This dynamic is happening simultaneously across multiple farms and supermarkets. Bird flu also generally dissipates in the summer, but outbreaks began anew in last autumn heading into peak demand season around the winter holidays, Rubio said.

Some good news for consumers may be ahead, though, economists said.

Wholesale egg prices had declined to about $3.40 a dozen as of Friday, down from a peak $5.46 a dozen on Dec. 23, Rubio said. (Current wholesale prices are still almost triple their “normal” level, Rubio said.)

On average, it takes about four weeks for wholesale price movements to be reflected in the retail market for consumers, Rubio said.

“The pricing market is already coming down post-holiday,” said Smith at Advanced Economic Solutions.

The Easter holiday is usually another period of high seasonal demand, however, meaning prices may stay elevated through March, assuming the bird-flu outbreak doesn’t worsen, economists said.