For millions of Americans, a startling reality hit home over the past year: the humble egg, once a reliable and affordable source of protein, had suddenly become a luxury item. Prices tripled in some markets, with cartons selling for up to $9 for a dozen eggs that cost producers less than a dollar to make.

The explanation offered by the egg industry and repeated by most media outlets seemed straightforward enough: an avian flu epidemic had decimated flocks, creating a supply shortage that naturally drove up prices.

But that narrative cracked under scrutiny.

A detailed investigation by renowned antitrust journalist Matt Stoller reveals a far more troubling reality: the skyrocketing price of eggs had less to do with bird flu and much more to do with the monopolization of America’s egg supply chain.

“Despite the ‘act of God’ going on — and the skyrocketing prices accompanying it — egg production is actually not down by all that much,” Stoller reported, noting that monthly egg production during the last three years averaged only 3-5% lower than in 2021, before the epidemic began.

Meanwhile, demand for eggs actually declined by approximately 10% as Americans cut back on consumption due to high prices. U.S. egg exports also fell by nearly half between 2021 and 2022 as countries closed their markets to American eggs over avian flu concerns.

So if production was down only slightly while demand was falling significantly, why did prices triple?

The Corporate Shell Game

The real story behind egg inflation stretches back decades, to a time when the egg industry underwent massive consolidation that has left virtually every segment of the supply chain under the control of one or two powerful corporations.

At one end of the egg supply chain sit two secretive European firms that control the genetics of nearly all egg-laying hens in America. The billionaire-owned Erich Wesjohann Group (EWG) from Germany and the private-equity-backed Hendrix Genetics from the Netherlands have systematically acquired or crushed rivals until they now control an estimated 90% of the chicken genetics market for layer hens.

At the other end stands Cal-Maine Foods, America’s dominant egg producer, which accounts for approximately 20% of the U.S. egg market but wields outsized influence through its leadership position in industry associations.

“We don’t have egg companies in the business of making eggs anymore,” Stoller wrote. “We have egg companies in the business of exploiting egg shortages, almost a private government of eggs.”

A Tale of Two Flu Outbreaks

The contrast with previous avian flu outbreaks is striking and revealing.

During similar epidemics in 1983-1984 and 2015, the egg industry responded by rapidly rebuilding and expanding flocks, which checked price increases and brought costs back to normal within months.

After the 2015 outbreak, egg producers added hens to their flocks at a rate of 4.15 million per month, replacing nearly all the hens lost to avian flu within just seven months. By March 2016, egg production was higher than before the epidemic, and prices had not only returned to pre-epidemic levels but were dropping even lower.

This time, the response was dramatically different.

Since 2022, rather than expanding production to meet demand and capture high prices — as would happen in a competitive market — the industry has maintained what Stoller calls a “stubborn deficit in egg production capacity.”

Hatcheries, now under the control of the European genetics duopoly, reduced the size of their breeding flocks by nearly 20% between 2021 and 2024. They’ve also been hatching significantly fewer parent chicks to replace aging ones — nearly 380,000 (or 12%) fewer in 2022 compared to the year before.

Meanwhile, egg producers added between 5 and 20 million fewer pullets (young hens) to their farms in each of the last three years compared to 2021 levels.

The USDA itself noted with “astonishment” that “producers—despite the record-high wholesale price [of eggs]—are taking a cautious approach to expanding production.” The following month, it reduced its table-egg production forecast for the entirety of 2023 on account of “the industry’s [persisting] cautious approach to expanding production.”

Following the Money

The financial consequences of this restraint have been staggering — for consumers and corporate profits alike.

Cal-Maine Foods, the only publicly traded major egg producer, saw its annual gross profits in the past three years float between 3 and 6 times what it earned before the avian flu epidemic. The company broke $1 billion in profit for the first time in its history, with unprecedented 50-170% margins over farm production costs per dozen eggs.

The windfall profits across the industry have likely amounted to more than $15 billion since the epidemic began, according to Stoller’s analysis. Rather than investing these profits in rebuilding and expanding flocks, the money appears to have been spent primarily on stock buybacks, dividends, and acquisitions of rivals.

EWG’s North America operations saw revenues explode from €492 million in 2015-16 to €1.26 billion by 2021-22 — and that’s before accounting for the full impact of the current avian flu epidemic.

Hendrix experienced similar growth, with its layer genetics division earnings jumping from €116 million in 2015 to €254 million in 2023.

How We Got Here: The Dismantling of Competitive Markets

This wasn’t always how America’s egg industry operated. Until the 1980s, the egg supply chain was decentralized and competitive at every stage, from chicken breeding to retail sales.

This system was built during the New Deal era by Agriculture Secretary Henry Wallace, who developed methods for cross-breeding hens and shared these techniques widely through USDA extension offices at land grant colleges. The result was dozens of competing “primary breeders” creating a dynamic chicken genetics industry with many local and regional players.

Strict antitrust enforcement prevented the largest breeders, hatcheries, and egg producers from growing through serial acquisitions or handicapping rivals’ access to customers or suppliers.

That changed dramatically starting in the Reagan administration, when antitrust enforcement was relaxed based on the belief that corporate size and market domination reflected efficiency rather than market power. The Clinton administration continued this approach, further enabling industry consolidation.

As one agricultural economist noted in 1978, before this consolidation began: “Eggs will be processed and produced in this country if there is a fair return on investment. When the return [on eggs] becomes high, there will be expansion of production that will reduce prices.”

That natural market mechanism has been broken by concentration.

Breaking Eggs

Today, egg prices are finally coming down — not because the industry has decided to lower prices, but because demand “went off a cliff” after prices rose to extreme levels, forcing many consumers to find alternatives or simply go without.

The Justice Department’s Antitrust Division has reportedly launched an investigation into the egg market. The timing is significant: just last year, a federal jury found that Cal-Maine executives had previously taken over leadership of the United Egg Producers association and turned it into what a judge analogized to a “mob boss” for the industry, coordinating a conspiracy to restrict egg supply.

This pattern of supply restriction in concentrated industries is becoming familiar across the American economy. From baby formula to cancer drugs to beef, shortages and supply shocks in monopolized markets are increasingly common.

For consumers, the lesson is clear: when industries become highly concentrated, companies gain the power to profit from scarcity rather than abundance — a direct contradiction to the promises of market capitalism.

The next time you pay for a carton of eggs, remember that the price tag reflects not just the cost of production, but the cost of monopoly power.