The Consumer Price Index came in lower than expected at 8.5 percent in July, but inflation is still hitting grocery shopping, with the food-at-home category soaring to 13.1 percent over the last year. According to the Department of Labor, this is the largest increase since the period ending March 1979.
Egg prices have been driven higher by one of the worst bird flu outbreaks in U.S. history, killing over 30 million commercial and wild birds. The crisis hurt the egg-laying hens and turkeys the most. (Related: Pandemic? Bird flu found at multiple poultry farms in Alabama.)
The outbreak has eased in the U.S., but growers are still repopulating their flocks, and prices are expected to go down after.
In California, where sales of non-cage-free poultry are not allowed, a new law pushed up prices even higher, driving up the average cost per dozen eggs at $4.52. This is outdone only by Hawaii, where prices come at a whopping $7.
Low-cost retailers like Costco saw prices jump at least $1 over the past few weeks. Costco's store in Orange County, California, had sold out all pallets of white eggs, leaving only pricier, organic brown eggs. A sign also said "Limit 2" with the price tag of $8.49 for a two-dozen pack.
Low-cost poultry a thing of the past
In the long run, the low-cost poultry could be a thing of the past as two top chicken companies merged with a third to control 15 percent of the chicken market. This means that the top four chicken companies now hold a 60 percent market share, pushing out lower-level farms.
This move could be the start of a wave of consolidation in the chicken industry, experts warn. More crunch could further centralize power among the biggest processors. When this happened before, chicken processors often charged higher prices and kept more of the profits despite little change to what the farmers and the factory workers are paid.
Overall, consumers lose when they have fewer choices in the supermarket, according to Joe Maxwell, the president of the advocacy group Farm Action, which consults with the Department of Justice investigators as they deliberated on the merger.
Cargill and Continental Grain's acquisition of the publicly traded Sanderson Farms is "disturbing," Maxwell said. "The manipulation which can go on within the market on feed costs, knowledge, data, could be used against the other 40 percent, only causing greater concentration in the future. When you get to these levels of control of a market, it allows for corruption, collusion and price-gouging." (Related: Minnesota temporarily bans sale and exhibition of poultry, claiming avian flu is hitting over a million birds in the state.)
Concerns over a further consolidation of the industry were tempered by the proposed consent decree with the companies, which would monitor the chicken companies for anti-competitive practices, pay workers for past harms and prevent companies from exchanging information about wages and benefits. All of the consent decrees must be approved by a court after a 60-day period that allowed for public comments.
Federal policy solutions are necessary to restore fair and competitive conditions, said policy director for Family Farms and the Environment, Patty Lovera. She said her organization is prepared for more consolidation as s result of the Wayne-Sanderson deal.
"This is already an industry where a handful of companies have a lot of power. Any deal like this makes that trend even worse," she said.
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More related stories:
Government says "bird flu" responsible for rising egg prices.
3 Reasons why CHICKEN prices are set to rise across the world.
Food supply 101: Differences between farm-fresh eggs and store-bought eggs.
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