- DOJ antitrust probe targets Cal-Maine's pricing strategies following 166% profit surge
- Record $5.90 egg prices linked to avian flu losses exceeding 166 million chickens
- Q3 revenues hit $1.42B despite 10% sales volume increase missing forecasts
America's largest egg producer faces mounting pressure as federal regulators examine whether pandemic-era price hikes crossed legal boundaries. Cal-Maine Foods reported staggering third-quarter earnings of $508.5 million, more than triple its 2023 profits, while urban consumers faced unprecedented $5.90 averages for Grade A eggs. This financial success comes as the poultry industry grapples with historic challenges - the deadliest bird flu outbreak in U.S. history decimated 20% of the national laying flock.
The Department of Justice's antitrust division appears focused on untangling complex market forces. While Cal-Maine attributes 84% of its revenue growth to unavoidable production constraints, critics highlight the company's expanding 22% market share during the crisis. Industry analysts note that feed costs actually decreased 18% during the investigation period, complicating the narrative of pure cost-driven pricing.
Regional impacts reveal surprising patterns. Texas supermarkets saw egg costs spike 142% following Cal-Maine's temporary closure of its Waco facility, while Kansas consumers benefited from faster supply chain recovery through local co-ops. This disparity underscores how geographic vulnerabilities magnify national price trends. Commercial bakeries in the Midwest report switching to liquid egg alternatives, creating an unexpected 9% demand shift in processed egg markets.
Three critical insights emerge from this crisis. First, poultry vaccination rates remain alarmingly low at 12% industry-wide despite repeated avian influenza warnings. Second, grocery retailers absorbed 43% of wholesale price increases through Q1 2024, suggesting coming consumer price adjustments. Third, Cal-Maine's strategic chick reserves position it to control 28% of 2025's anticipated flock recovery - a vertical integration advantage drawing regulatory attention.
As the DOJ investigation progresses, food economists warn of structural changes. The $7.2B egg industry's reliance on just three major producers creates systemic risks, with 78% of restaurant operators now seeking alternative protein suppliers. Meanwhile, Cal-Maine's aggressive biosecurity investments - including $28M spent on climate-controlled henhouses - signal long-term strategies that could redefine competitive practices in agricultural commodities.