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Shares of Cal-Maine Foods, which supplies about 20% of eggs to the US market, plummeted by more than 4% after the close of trading on Tuesday. The reason was the company’s statement about an anti-competitive investigation initiated by the US Department of Justice in connection with a sharp jump in egg prices. This was reported by the Associated Press.
Cal-Maine, which is headquartered in Mississippi, confirmed that it received an official notice of investigation last month. The company assures that it is cooperating with the authorities. But amid inflationary consumer sensitivity and political pressure, even this cooperation did not save its shares from falling.
Egg prices soar to historic highs
The economic basis for the price increase looks convincing: the bird flu epidemic has forced farmers to kill more than 166 million birds, mostly laying hens. As a result, the price of a standard tray of 12 eggs in the US reached $5.90 in February 2025, up 10.4% year-on-year. This is the second record in a row after January’s $4.95.
Amidst this crisis, Cal-Maine almost doubled its revenue to $1.42 billion in the third quarter of the fiscal year ended 1 March. The company’s average price per tray of eggs was $4.06, up from $2.25 last year.
Huge profits, big risks
The company reported that it sold a record number of eggs – 331.4 million trays, which is 10% more than in the same period last year. In addition, Cal-Maine claims to be successfully dealing with the effects of bird flu: it is increasing its chicken population, restoring farms in Texas and Kansas, and recording a reduction in feed costs.
However, it was this increase in profits against the backdrop of rising prices that prompted the US antitrust authorities to intervene. Suspicions are that there may have been collusion or non-competitive pricing in the face of shortages. The outcome of the investigation could have serious consequences for the market and consumers.
Inflation is Trump’s main political card
Former US President Donald Trump, who is actively preparing for the November elections, has made the fight against inflation a central theme of his campaign. He has repeatedly promised to reduce food prices. But high egg prices remain a sore point for consumers and politicians alike.
The current situation with Cal-Maine can be either a trump card or a threat, depending on the outcome of the investigation and the market’s reaction.
