‘Bird flu? Now’s our chance to raise egg prices!’

Consolidating industries are apparently learning from other near-monopolies, and are using pretexts to boost prices – and profits – at the expense of consumers.

An ag advocacy group, Farm Action, this winter wrote the Federal Trade Commission asserting that despite business claims, rising prices for eggs isn’t due to bird flu or inflation, but outright price-gouging.

“The real culprit behind this 138% hike in the price of a carton of eggs appears to be a collusive scheme among industry leaders to turn inflationary conditions and an avian flu outbreak into an opportunity to extract egregious profits reaching as high as 40%,” reads the letter to the FTC from the group, based in Washington, D.C.

The average price for a dozen eggs increased from $1.79 in December 2021 to $4.25 in December 2022, according to the St. Louis Federal Reserve.

In greater Peoria, prices in February ranged from $2.39/dozen (Hy-Vee) to $5.99/dozen (County Market), with a dozen eggs selling for $4.69 at Kroger and $5.44 at Schnuck’s.

Bird flu in 2022 killed an estimated 43 million commercial egg-laying hens, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service says. However, in 2015 the disease was deadlier but didn’t result in similar price hikes. That outbreak killed about 50 million egg-laying hens, according to the USDA’s Economic Research Service, and prices doubled from $1.29 to $2.61, USDA shows. Nevertheless, after the recent bird flu, egg prices have tripled on average.

Losses from bird flu largely subsided after early June, Farm Action says, noting that with hatched chicks maturing, the average size of egg-laying flocks was never more than 8% lower than the year before. Further, the USDA reported “record-high” lay rates throughout the year – between 1% and 4% higher than the average dating to 2017.

The price problem probably stems from an increased consolidation of egg production. The biz-talk euphemism is “vertically integrated industry,” mainly through mergers and acquisitions, so egg production is much more in the hands of fewer big corporations. The biggest is Cal-Maine Foods, with almost 47 million egg-laying hens, controlling about 20% of the egg market, Farm Action says.

Some increases in fuel and feed costs occurred but just 22% higher than last year, Cal-Maine conceded in a presentation to investors in January. Still, Cal-Maine’s gross profits were up 10-fold from a six-month period in 2021 to the same period last year, according to the corporation’s financial statement filed Dec. 28.

The market is less competitive and more tempting for any producer to hike prices.

“If our market was truly competitive and working the way it’s supposed to work, then if one dominant firm tries to raise their price, another firm should try to take their market share,” said Sarah Carden, Farm Action’s senior policy advocate told the Center for Rural Strategies. “But instead what we see is all of them raising their prices.

“To increase your gross margins by 345% from the year before while consumers are looking at at least doubled egg prices – I mean, that’s just theft,” she added.

Just as some other industries’ producers and suppliers used the pandemic supply-chain disruptions or Russia’s invasion of Ukraine as excuses to raise prices much more than the cost affected by such factors, bird flu or inflation became an invitation for smaller rivals to jump on the (chicken) gravy train in unspoken collusion.

“In the end, what Cal-Maine Foods and the other large egg producers did last year – and seem to be

intent on doing again this year – is extort billions of dollars from the pockets of ordinary Americans

through what amounts to a tax on a staple we all need,” says Farm Action legal counsel Basel Musharbash.

Since there’s no real substitute for eggs, whether baking, brunching or any number of uses, what can be done?

Follow the law, says Musharbash, calling on the FTC to investigate Cal-Maine and the country’s other large egg producers for “anti-competitive arrangements that suppress competition among egg producers.

“We urge the FTC to examine the pricing and production behavior of dominant firms in the egg industry over the past 12 months,” he says.

UAW faces Caterpillar with other issues in the air

The United Auto Workers’ international runoff-election vote count starts March 1, just hours after the union’s contract with Caterpillar expires, possibly leading to a work stoppage by some 6,000 members of four UAW Locals in the Peoria area, Decatur, Pontiac and York, Pa.

If they walk out, it would be the third strike at a big construction-equipment manufacturer in a short time, after Deere and CNH.

Days after main bargaining started Jan. 23, a reported 98% of the 3,600 Local 974 members casting ballots voted to authorize a strike, giving union leaders the power to call a strike.

Local 974 bargaining chair Bobby Koller in the union’s December/January newsletter reminded workers about striking.

“[To] all members that are full-time, part-time, supplemental or in the probation period: In the event we go on strike, you are very much protected on the gates. If you choose to cross the picket line and report to work, you are not protected by the grievance procedure and can be terminated by the company for any reason.”

Contract talks are happening as the international union is changing. After a 2014 scandal resulting in convictions of two UAW officers, two Fiat-Chrysler executives and others, federal intervention sought greater UAW transparency, and a rank-and-file referendum voted to start using direct elections to choose leaders. The result was UAW’s secret-ballot, mail-in election concluding Dec. 2, but since no candidates won a majority in several races, a runoff was required over January and February.

Opposing the current administration was the Members United group, which fielded candidates and won 5 of 14 seats on the executive board, including two Vice Presidents and the Secretary-Treasurer, but the race for President between incumbent Ray Curry, challenger Shawn Fain and others failed to end with an overall majority.

Besides corruption by a few national leaders, the union isn’t as strong as the post-war era, when legendary Walter Reuther’s faction won the leadership of the million-member union and influenced it for decades. But in the ’80s, employers’ increasing threats to “permanently replace” lawful strikers, competing foreign manufacturers, factory shutdowns and outsourcing work to Right-To-Work states or even overseas all hurt organized labor. At the UAW, there was dissatisfaction with concessionary contracts such as the last settlement with Fiat-Chrysler, and anger about divisive two-tier wages (paying new hires less than existing workers).

However, recent years saw growing strength, from a six-week strike by 50,000 GM workers in 2019 to successfully organizing the Ultium Cells battery plant in Warren, Ohio. About 10,000 workers struck Deere for more than a month, and achieved a 10% raise, and the union settled a five-month strike by 1,000 workers at CNH, though not without some displeasure by strikers resentful of the company’s plan to hire scabs.

The UAW’s membership is changing, too; for instance, college workers represented by the UAW now make up almost 20% of members.

“It sounds like part of what’s behind the strike push is the big win at Deere,” said Labor Notes journalist Jonah Furman. “Deere workers were already better off than those at Caterpillar in the first place, meaning expectations may be high for improvements at Cat, and the notoriously anti-union company may likewise be looking to make a stand.”

Local 974 leaders didn’t respond to repeated inquiries, but UAW Local 180 President Yasin Mahdi in Burlington, recovering from the CNH strike, encouraged UAW International leaders facing negotiations this year with Cat, Ford, GM and Stellantis (formerfly FiatChrysler).

“Don’t cut them any slack,” he said.

Food-safety program funds anti-union lobby

Restaurant workers might be surprised to have to pay $15 for an online class on safe food practices before they get their first paycheck, but that relatively rude awakening is made worse when some realize the money for the “ServSafe” program goes to the National Restaurant Association, which bought ServSafe in 2016.

 

The business group for years has spent countless hours and millions of dollars against worker issues ranging from raising the minimum wage to unionization.

 

Now, however, an effort by a worker-advocacy group is trying to offer a neutral option: a food-safety program owned by restaurant workers. “Just.Safe.Food.,” a cooperative created by the One Fair Wage, a national organization based on Massachusetts, is being promoted as not only cheaper ($10), but free from the conflict of unwittingly funding efforts to curb wages, oppose health-care expansion and fight organizing.

 

“The National Restaurant Association was founded to suppress service workers’ wages. But … most people didn’t know — the National Restaurant Association is stealing from its low-wage workers in order to fund that anti-worker lobbying,” said, One Fair Wage President Saru Jayaraman. “Restaurants like Applebee’s and Olive Garden make millions of dollars by paying restaurant workers a federal sub-minimum wage of just $2.13 an hour. The fact that they fund lobbying efforts to kill laws raising wages by charging workers for food-safety training is beyond outrageous.”

 

The ServSafe program used to be run by a charity, the National Registry of Food Safety Professionals, loosely tied to the restaurant association. But in 2016, the association bought the operation and made it into an indirect fundraising vehicle. After that, state restaurant associations in Illinois, California, Florida and Texas successfully lobbied for changes expanding food-safety training from restaurant managers to all “food “handlers,” from cooks and bartenders to waiters and even those who bus tables.

 

“Food handler training is required in Illinois [but] not ServSafe specifically,” One Fair Wage Director of Policy & Communications Alex Morash told the Labor Paper. “Most employers use ServSafe – it has a monopoly presence.”

 

Nationally, more than 3 million workers have taken such training, generating millions to the restaurant industry’s lobbying. The National Restaurant Association’s spending on politics and lobbying more than doubled in recent years, according to tax filings analyzed by the New York Times, contributing to politicians from both major parties,  conservative think tanks, and state restaurant associations. In 2022 alone, it spent $2.1 million on lobbying, according to federal data analyzed by the Center for Responsive Politics.

“I’m sitting up here working hard, paying this money so that I can work this job, so I can provide for my family,” said Mysheka Ronquillo, 40, a Carl’s Jr. and school cafeteria cook and a labor organizer in California, speaking to the New York Times. “And I’m giving y’all money so y’all can go against me?”

 

Participating in Jan. 25 protests outside restaurant association offices in Illinois, Maryland, Michigan and New York, One Fair Wage seems part of a resistance, in the streets and in kitchens, in labor halls and the halls of government. One Fair Wage is urging elected officials to pass laws repealing mandatory worker contributions to ServSafe, and is asking state attorneys general and the IRS to investigate whether the National Restaurant Association violated laws by mixing training and lobbying funds.

Nationally, there are headwinds to such reforms. One Fair Wage reported that federal data show that the National Restaurant Association made about $2 million in direct campaign contributions to the current Congress; 11 Democrats and 39 Republicans in the Senate and 42 Democrats and 125 Republicans in the House.

“Any elected official who claims to care about workers should immediately reject National Restaurant Association lobbying money, and return those stolen funds to the workers fighting to raise wages for all Americans,” Jayaraman said. “Across the country, the American people think wages are too low – and want a raise. It’s time politicians stop listening to the owners of major restaurant chains, and start listening to the American people.”

(House Minority Leader Hakeem Jeffries [D-N.Y.] pledged to give away any contributions his campaign received from the restaurant lobby).

Meanwhile, Morash said, One Fair Wage is in the process of getting national accreditation for Just.Safe.Food., designed to educate workers on safe food storage, handling and preparation. After it’s approved – in three-to-six months, he said – it will be up to the employers or the workers to use it, depending on their state.

“In Illinois, “there is a discussion among legislators about requiring employers to pay for this training rather than workers,” he said.