Justice Department Probes Egg Prices: Despite Rising Price, Consumers Remain ‘Willing and Able’ To Buy

Rising egg prices have been making headlines for months now, with a large proportion of the increased costs being passed along to American consumers justified by the continuing avian flu problem plaguing the industry.

Now, however, the Justice Department has initiated an investigation over the matter, as The Wall Street Journal reported. The department’s probe concerns whether large producers of eggs have been colluding to raise prices, stymie supply, or both — at least according to people cited as being familiar with the matter.

The Justice Department investigation remains in its infancy, per the WSJ, with letters having been sent to several larger egg producers asking for preservation of documents relevant to egg-related discussions held with both customers and competitors. Communications with Urner Barry — now known as Expana, which tracks wholesale egg price information — have also been requested to be collected and preserved.

It is not yet known whether the investigation involves civil or criminal authorities. The Justice Department has thus far refused public comment, while Emily Metz, chief executive of the American Egg Board — an industry-funded marketing organization — suggested that farmers and other industry workers were equally frustrated by the current situation.

“Farmers know people are frustrated and they are frustrated too by the situation,” Metz said. “They know they are not able to put on the volume of eggs that people want.”

Despite Rising Egg Prices, Consumers Seem ‘Willing and Able’ To Keep Buying

On the other hand, as Axios reported, some experts suggested that Americans aren’t balking when it comes to buying eggs at record-high prices.

After introducing readers to the concept of economic elasticity (the degree to which consumers are either willing or unwilling to purchase a particular commodity), Axios noted that eggs appear to have low elasticity. In other words, even if prices keep ticking upward, U.S. consumers keep buying eggs.

Berkeley economist Aaron Smith conducted research resulting in the notion that it took a 228% increase in egg prices to drive just a 4% reduction in demand.

“Egg demand is inelastic because there are few good substitutes and it doesn’t take up a huge portion of most people’s budget,” Smith wrote. Despite it not being ideal to pass over a few more bills to pay for a carton of eggs, “most people are willing and able to do it,” he added.