Maybe There Was an Egg Cartel After All

When you see the cost of an everyday item — the kind you're going to buy regardless of price — more than double in a year, do you get suspicious?

When it came to eggs, whose average price in a U.S. supermarket went from $1.93 per dozen in January 2022 to $4.82 a year later — and not even for the lovingly cared-for, cage-free variety — Americans had their choice of explanations. Some supply chain experts pointed to continued pandemic-era disruptions. The geopolitically minded cited impacts of war in agriculturally productive Ukraine, shrinking global supply while driving up fuel and feed costs. Republicans blamed the Democratic administration for wild spending that prompted widespread "Bidenflation." Most Americans appeared content with the prevailing rationale they were given: Bird flu, an epidemic with a near-100% mortality rate, contributed to the death of 43 million egg-laying hens in 2022 alone while consumers continued to crave omelettes.

Peter Carstensen, a law school professor and fellow at the American Antitrust Institute, watched the prices of eggs rise from his Wisconsin home and suspected all those explanations were ignoring the potential for human villainy in a market where demand remains fixed. "Eggs are a classic example of where collusion makes an awful lot of sense," said Carstensen. "I am going to have my two eggs and bacon every Wednesday, and on Saturday as well, regardless of the price of eggs."

The suspicion of antitrust hawks like Carstensen — that producers were choosing to raise prices in tandem to increase profits rather than competing in a way that would drive prices down — was dismissed by mainstream economists and commentators as the work of cranks looking past simple economics for a true crime story that could exist only in their minds. Washington Post columnist Megan McArdle waved away "internet memes and a fair amount of conspiracizing," as she put it, "about monopolistic egg producers colluding to raid the pockets of hard-working, egg-loving Americans."

Other free marketeers made it a Rorschach test of financial literacy flunked by those desperate to feed a populist cause. "You don't need shadowy conspiracies of egg producers to understand the dynamics of egg-flation in the United States," agricultural economist Jeremy Horpedahl wrote on a blog for the libertarian Cato Institute. "All you need to explain the price fluctuations of eggs is good old supply and demand."

The truth was out there. Investigators found what they considered evidence of a scheme in which three of the country's largest egg producers coordinated inflated bids to a central price clearinghouse so as to artificially drive up prices in ways immediately felt by consumers, as the U.S. Justice Department and 17 state attorneys general outlined in a lawsuit. It took three years for them to disentangle the alleged conspiracy, with limited consequences for the companies, which never admitted wrongdoing. The cranks, it turned out, just saw what no one else did — and the rest of us are still catching up.