Eggs Are Still Expensive. Is This Company to Blame?

Summary

Summary of "Eggs Are Still Expensive. Is This Company to Blame?" – The Journal Podcast

Introduction

In the May 22, 2025 episode of The Journal, hosted by Annie Minoff and Patrick Thomas, the spotlight is cast on the persistent rise in egg prices and the role of Cal-Maine Foods, America's largest egg producer. This detailed exploration delves into the factors driving up egg costs, the company's substantial profits amidst a national shortage, and the ensuing backlash from consumers, politicians, and advocacy groups.

Background: Egg Consumption and Bird Flu Impact

The episode begins by highlighting the quintessential place of eggs in American households. Patrick Thomas notes, “[People eat] about an egg a day roughly, and a hen produces roughly an egg a day. So the easiest math to think of the egg industry is that everyone has their own hen” (00:17). However, recent waves of avian influenza have devastated the poultry population, resulting in the deaths of over 150 million chickens nationwide. This significant reduction in supply has been a primary driver behind the historic surge in egg prices, leading to widespread consumer frustration.

Cal-Maine's Operations and Strategic Positioning

Cal-Maine Foods, despite being the largest egg producer in the U.S., remains relatively obscure to the average consumer as their eggs are marketed under various local brand names. Patrick Thomas describes a tour of one of their vast facilities in rural Mississippi, emphasizing the scale of their operations: “They hold about 750,000 hens” (03:20). With dozens of similar facilities nationwide, Cal-Maine produces approximately 12 billion eggs annually, supplying one out of every five eggs consumed in America.

Financial Performance and Profit Surge

The core of the episode investigates Cal-Maine’s financial success amid the egg shortage. Patrick Thomas reveals, “Cal Maine Foods... just posted a massive profit, $509 million. That is quarterly profit for the same quarter last year” (00:53). Their strategic biosecurity measures, implemented proactively since anticipating the bird flu outbreak, have allowed them to maintain production levels while competitors struggled. This resilience has translated into record-breaking profits and a skyrocketing stock market performance, with shares increasing by 64% and the company's market value doubling in two years.

Criticisms and Accusations: The Alleged Price Gouging

As Cal-Maine reaped the benefits of high egg prices, the company became the target of severe criticism. Social media influencers on platforms like TikTok accused them of price gouging, while political figures such as Congressman Ro Khanna echoed these sentiments. Consumer advocacy groups, notably Farm Action, have been vocal, asserting that Cal-Maine’s dominance exacerbates the egg shortage by not increasing production sufficiently to meet demand. Patrick Thomas summarizes the criticism: “They say that this company has used its scale to influence the price of eggs or production, or they're not doing enough to put more hens in production and alleviate the national egg crisis” (09:03).

Cal-Maine's Defense and Response

In response to the allegations, Cal-Maine's CEO Sherman Miller presented a robust defense. During an exclusive interview, Miller stated, “The villain is a very nasty high path avian influenza virus” (05:31), attributing the egg shortage primarily to factors beyond the company’s control. He elaborated on the complexities of egg production, explaining that increasing the number of hens is not a straightforward solution due to the biological and economic constraints involved. Miller emphasized, “Eggs are a commodity. They’re not widgets that we can just go out there and turn up the machine or run an extra shift and produce more” (10:48), underscoring the challenges in rapidly scaling production without incurring losses.

Cal-Maine has indeed expanded its operations by adding 14% more hens and increasing chick hatching by 24% over the past year. However, Miller cautions against overexpansion, warning that an oversupply could lead to significant financial losses if egg prices were to fall: “If demand eventually falls, the company could find itself sitting on too many eggs” (12:22).

Legal History and Ongoing Investigations

The episode also touches on Cal-Maine’s contentious legal history, which includes a 2023 federal jury ruling that accused the company and other major egg producers of restricting supply in the early 2000s to inflate prices—a charge Cal-Maine has consistently denied. Additionally, in 2020, the Texas Attorney General sued Cal-Maine for alleged price gouging during the COVID-19 pandemic, a case that remains unresolved. Currently, the Department of Justice has launched an investigation into Cal-Maine and other egg producers, requesting the preservation of documents related to pricing strategies (10:07).

Conclusion and Future Outlook

As the episode draws to a close, Patrick Thomas offers a nuanced perspective: “I don't know if I'd tell them who to blame, but I would say... the bird flu is the culprit of all of this... egg prices are on their way down and will probably come down, but they might spike back up again” (15:51). The hosts suggest that the egg market has entered a state of volatility, largely influenced by ongoing avian influenza outbreaks, which may lead to persistent fluctuations in egg prices. This new normal will likely require consumers and producers alike to adapt to the challenges posed by unpredictable supply chains and market demands.

Notable Quotes

• Patrick Thomas (00:17): “People eat about an egg a day roughly, and a hen produces roughly an egg a day. So the easiest math to think of the egg industry is that everyone has their own hen.”
• Sherman Miller (05:31): “The villain is a very nasty high path avian influenza virus.”
• Sherman Miller (10:48): “Eggs are a commodity. They’re not widgets that we can just go out there and turn up the machine or run an extra shift and produce more.”
• Patrick Thomas (15:51): “The bird flu is the culprit of all of this. Egg prices are on their way down and will probably come down, but they might spike back up again.”

Final Thoughts

This episode of The Journal provides a comprehensive examination of the intricate dynamics within the egg industry, highlighting how external factors like avian influenza can intersect with corporate strategies to influence market prices. By presenting multiple viewpoints—from Cal-Maine's defenses to the mounting criticisms—the podcast offers listeners a balanced understanding of the challenges and complexities that underpin America's egg crisis.

Transcript

[Annie Minoff]

Americans eat a lot of eggs and that includes our colleague Patrick Thomas, who likes them scrambled.

[Patrick Thomas]

A go to on the weekend. You know, bagel and scrambled eggs. Right.

[Annie Minoff]

Patrick covers agriculture.

[Patrick Thomas]

People eat about an egg a day roughly, and a hen produces roughly an egg a day. So the easiest math to think of the egg industry is that everyone has their own hen.

[Unnamed Colleague]

Personal chicken.

[Patrick Thomas]

Everyone's got a personal chicken.

[Annie Minoff]

But over the past few years, a lot of those chickens have died, more than 150 million of them, as waves of bird flu have swept the country. That's helped catapult egg prices to historic highs, angering consumers. And some are pointing the finger at more than just bird flu. They're blaming a company called Cal Maine.

[Patrick Thomas]

Cal Maine Foods, the biggest egg producer in America, just posted a massive profit, $509 million. That is quarterly profit for the same quarter last year. Here they are at the end of the year recording record profit. So they raised all the prices for no reason at all.

[Annie Minoff]

Cal Main is the largest egg producer in the country. It supplies one out of every five eggs that Americans eat. Despite that, it's not well known, partly because Cal Main's name isn't on the egg carton. Its eggs sell under local brand names. But it's also because the company's pretty secretive. It doesn't do investor calls and rarely gives media interviews. Lately though, it's been attracting attention because of those massive profits. So Patrick set out to learn what he could about this little known company at the center of America's egg crisis.

[Patrick Thomas]

I wanted to set out to just understand them and get to the root of what they make of this criticism levied against them, what is kind of their side of the story and understanding them a bit to see if there is anything to the accusations or not.

[Annie Minoff]

Welcome to the Journal, our show about money, business and power. I'm Annie Minoff. It's Thursday, May 22nd. Coming up on the show, Eggs are egg Spensive is Cal Maine to foreign.

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[Annie Minoff]

Cal Maine is headquartered in rural Mississippi. Patrick went out there and he got a tour of one of the company's egg producing facilities.

[Patrick Thomas]

You're pulling up and there's some cattle are in the pasture nearby. And you can see there's a line of these big metal barns or chicken houses, as they're called. And they've got these big fans on the side, and there's 14 of them in a row. They hold about 750,000 hens.

[Annie Minoff]

Whoa.

[Patrick Thomas]

Yes.

[Unnamed Colleague]

Can you hear them?

[Patrick Thomas]

You cannot.

[Unnamed Colleague]

I'm just imagining.

[Annie Minoff]

Buk, buk, buk buk.

[Patrick Thomas]

You cannot. These are metal barns that are enclosed to keep everything out. You want to make sure there's no vermin or anything that's going to be able to get in. So you don't hear anything coming out of them. They're pretty secure.

[Annie Minoff]

Tens of thousands of eggs from those 14 barns are funneled into a processing facility on a conveyor belt.

[Patrick Thomas]

They come out and they're, you know, maybe like dirty or something or have like a feather on them or something like that. So they come through and then they go through basically a wash. So they get bathed and come out clean and sparkling white on either side. They get sorted and plopped six at a time into these cartons.

[Annie Minoff]

Cal Maine has dozens of facilities like this one across the country. At one point, they stretched from California to Maine, thus the name. Those facilities produce about a billion dozen eggs a year.

[Patrick Thomas]

So that would be 12 billion eggs. So we're talking that's 12 billion is a lot.

[Unnamed Colleague]

A little boggles the mind that scale.

[Patrick Thomas]

12 billion is a lot of eggs.

[Annie Minoff]

The person overseeing this giant operation is Cal Maine's CEO, Sherman Miller.

[Unnamed Colleague]

Introduce us to Sherman Miller.

[Patrick Thomas]

So Sherman Miller is a Cal Maine lifer, this man. He jokes that his wife said he married Cal Maine before he married her. He started as an intern at Cal Maine. He was one of two interns, you know, and he says, good thing the other guy didn't make it. He's always been at Cal Maine and lives and breathes this company.

[Annie Minoff]

Patrick got a rare interview with Miller at the company's main office. His desk there is dotted with egg statues and an American flag hangs above his computer. Patrick says that Miller seemed eager to explain why Cal Maine wasn't the villain in this saga.

[Sherman Miller]

And I tried to name that villain for you right out of the gate. The villain is a very nasty high path avian influenza virus.

[Annie Minoff]

It was at the beginning of the most recent bird flu outbreak in 2022 that Miller became CEO.

[Patrick Thomas]

So the company at the time, they had seen that bird flu was going to happen. They had been planning for it since August. Around August of 2021 is what they said. And the reasoning is because it was spreading in Europe. And so they were expecting only a matter of time. It's only a matter of time before this comes into the US again. They spent about $70 million on various biosecurity measures.

[Annie Minoff]

Patrick saw some of those biosecurity measures firsthand when he was touring Cal Maine's egg facility. Vehicles were sprayed down with disinfectant before they drove in. And those fully enclosed barns keep hens away from the wild birds that carry bird flu. Measures like this seem to work.

[Patrick Thomas]

Some of their competitors had more cases or lost more facilities. Cal Maine hasn't had the same level of damage. And what that's meant for them is they've been able to really reap the. The benefits of the high egg prices.

[Annie Minoff]

Cal Maine didn't lose as many chickens and eggs as its competitors, and that put them in an enviable position. Because of the low egg supply. Prices were soaring. And unlike some of the competition, Cal Maine still had plenty of eggs to sell. The result was a windfall for the company. What came first, the chicken or the egg? Well, the egg came first.

[Patrick Thomas]

In this story.

[Sherman Miller]

Cal main foods, the egg company shares are soaring this year, up 64%.

[Patrick Thomas]

So they made a lot of money and are on track to make about a billion dollars in their fiscal year in profit. In their latest quarter, they had a profit of more than $500 million, which is their biggest ever. And their stock has been one of the best performers on wall street. It's, you know, their market value's doubled in two years.

[Annie Minoff]

High prices haven't just benefited Cal Maine, it's benefited the family who originally founded the company and still hold a lot of its stock.

[Patrick Thomas]

Basically, family members are cashing out their shares for at least $100 million per member, which tallies up to about $500 million. So they're cashing out at a pretty good time.

[Annie Minoff]

Family members declined to comment. It's pretty paradoxical.

[Unnamed Colleague]

Here they are, like, at the center of a crisis for their industry, and it's a bonanza.

[Patrick Thomas]

Yeah, and that's where the critics come in. That's why you have some groups scratching their heads, saying, how is that possible?

[Annie Minoff]

The critics who say that Cal Maine is a bad egg, they're next. As Cal main's profits soared during a national egg shortage, the company found itself cast as the egg villain. Tiktokers were accusing it of price gouging. And politicians have also been critical, like congressman ro Khanna.

[Patrick Thomas]

Cal Maine had over $350 million that they made just last quarter. Let's hold the big producers accountable so that we can lower egg prices for Americans.

[Annie Minoff]

Consumer advocacy groups have also accused Cal Maine of making a bad situation worse.

[Patrick Thomas]

There's this group called Farm Action, which has been pretty critical of large agriculture companies in the past.

[Annie Minoff]

We know that the farmers at the bottom of that chain, they're on the front lines of the avian flu. Meanwhile, these large companies like Cal Maine that are controlling the egg industry, they're raking in just unbelievable, record breaking profits. So those are the critics. What did they accuse Cal Maine of doing?

[Patrick Thomas]

They say that this company has used its scale to influe the price of eggs or production, or they're not doing enough to put more hens in production and alleviate the national egg crisis, or that they could be producing more eggs to help. And they're not doing it.

[Unnamed Colleague]

They're saying you could produce more eggs. You could, you know, produce more egg laying hens, but you're not or not as many as we would like.

[Patrick Thomas]

Correct. So that's their criticism. And it's a criticism against basically a large company saying has too much power to infl and demand of the egg market. It's their central criticism and they've called for investigations.

[Annie Minoff]

In March, the Department of justice opened an investigation into Cal Main and other egg producers, asking those companies to preserve documents about their pricing conversations. Cal Maine says it's cooperating with the doj.

[Unnamed Colleague]

So some of Cal Maine's critics are saying, hey, you should be using your size to produce more eggs. You could kind of help our pricing situation here. What is Miller's response and what is Cal Maine's response to the criticism?

[Patrick Thomas]

So the company's response is really that people do not understand commodities and that this is simple supply and demand, Economics 101, if you will.

[Annie Minoff]

Here's Miller again.

[Sherman Miller]

Eggs are a commodity. They're not widgets that we can just go out there and turn up the machine or run an extra shift and produce more. It's a long planning process where we're planning our business to meet our customer needs.

[Annie Minoff]

Cal Maine says that adding hens takes time. It's about six months before a chick is mature enough to lay eggs.

[Patrick Thomas]

Hens aren't just a sink that you can turn on and off. Basically, you can't just call them up off a bench and put a jersey on them and put them into the game. You can't quite do that. Once you get them on board and in production, you can't turn them off. They're Laying eggs. So we might have a shortage in a high demand period during a holiday stretch, for example. Okay, but what about right now, like here in May? There's a bit of a lull in egg demand. We would have an oversupply because we just built so many egg production. We brought in more hens online. You would be producing more eggs than Americans could actually consume. And so their point is, you would have eggs going into landfills.

[Unnamed Colleague]

It's interesting. I hadn't thought about how, you know, I think I understand that it's hard to ramp up production of eggs. You need hens, but you also can't turn them off when you want to.

[Patrick Thomas]

That's right.

[Annie Minoff]

Cow Main has increased egg production somewhat in the past year. It's added 14% more hens and upped the number of chicks it can hatch by 24%. But if Cal Maine increases production too much, it could find itself in a tough spot. If demand eventually falls, the company could find itself sitting on too many eggs.

[Patrick Thomas]

Analysts say that that would tank the price of eggs. So you would be going below the cost of production and they would be losing a ton of money. So it's a careful balance is what they're trying to say.

[Annie Minoff]

Miller says that Cal Main has done everything it could to supply eggs under circumstances that it can't control. Another criticism levied against Cal Maine is that the company is price gouging. But Miller says Cal Maine doesn't set the price of eggs. When it negotiates with a grocer, say Kroger, it does that based on something called the benchmark price for eggs. The benchmark price is kind of like a market price. A research firm sets the benchmark based on supply and demand for eggs across the country. Cal Maine uses that price to determine what it'll charge for its eggs. As Miller told Patrick, we are price.

[Sherman Miller]

Takers, not price makers.

[Patrick Thomas]

So they say, when it goes way up, it goes way up, so be it. When it goes way down, it goes down. So be it. So that's kind of why they deal with the price of eggs. It kind of follows the twists and turns of the egg market, if you will.

[Unnamed Colleague]

So Cal Maine is kind of saying, look, we don't unilaterally determine the price of eggs, but on a very literal level, don't they. Couldn't they decide, you know, what, eggs are really expensive? It's really hurting people right now. Let's. Let's lower the price of a carton by a buck. Could they do that?

[Patrick Thomas]

Well, it's a good question. I mean, so you're right in the sense that they would say that they don't control the price of eggs because they don't price it at retail consumers. You know, ultimately it's up to the grocery store to determine what consumers will see. So in theory, they could decide, hey, I'm going to give a massive price break to Kroger. But that doesn't mean Kroger, for example, hypothetically speaking, has to do that. They're still the ultimate arbiter of how much the consumer will pay for it. Right. So couldn't they lower the price? They could, but what they would say too is they don't want to set that precedent because as I mentioned earlier, the egg market is a very volatile place and they could easily tank and lose money. So as they would say, it's important to reap the rewards when prices are high and keep that money in case the egg market tanks and they can use it again. So they want to take the benefits of when things are good to survive when things are bad.

[Annie Minoff]

As Miller put it to Patrick, at.

[Sherman Miller]

The end of the day, we have been as good a stewards as we possibly could with everything entrusted us. We know that to be the case. It's very unfortunate.

[Annie Minoff]

Cal Maine argues it's just taking prudent steps to protect its business. But it has found itself in legal hot water in the past. In 2023, a federal jury decided that Cal Maine and other big egg producers had restricted supply in the early 2000s to raise prices. The egg companies denied wrongdoing. And in 2020, the Texas Attorney general sued Cal Maine for price gouging during the COVID 19 pandemic. Cal Maine says that panic buying drove up prices. That case is ongoing.

[Unnamed Colleague]

Having dug into this now, what would you tell someone who is steamed about high egg prices and wondering, who do I blame?

[Patrick Thomas]

I don't know if I'd tell them who to blame, but I would say, I mean, look, at the end of the day, the bird flu is the culprit of all of this. I also think it's important to keep in mind that egg prices are on their way down and will probably come down, but they might spike back up again. The virus is still happening. So we're seeing seasonal swings basically every year in and year out now. And I think we're going to see that for the foreseeable future.

[Annie Minoff]

So it sounds like this might be.

[Unnamed Colleague]

Our new normal for a little while.

[Patrick Thomas]

It could be our new normal, and I think people will probably have to understand that it is the new normal for at least the time being.

[Annie Minoff]

That's all for today. Thursday, May 22. The Journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.