The U.S. Justice Department is preparing an antitrust suit against a few major egg producers, including Cal-Maine Foods and Versova, over alleged price coordination, the Wall Street Journal said on April 17, citing people familiar with the matter.
Shares of Cal-Maine Foods were down nearly 3% in extended trading following the news.
U.S. egg producers have been facing a growing wave of class action lawsuits accusing them of price-fixing amid consumer frustration over higher prices of food products, including eggs.
The cost of eggs in the U.S. has been skyrocketing in recent years after bird-flu outbreaks wiped out millions of laying hens, triggering widespread supply shortages.
Additionally, U.S. producer prices rose to a seven-month high in February, driven by higher service and goods costs, with further pressure likely from rising oil prices and the persistent pass-through from tariffs.
According to the Producer Price Index report, U.S. producer goods prices were up 1.1% in February, with egg prices rebounding 93.6% after crashing 63.9% in January, when the Trump administration rolled back some tariffs.
Last year, Cal-Maine said it was cooperating with a U.S. Justice Department investigation into potential price-fixing by egg producers, after a civil investigative demand, adding that the scope, duration and outcome of the probe were uncertain.
Cal-Maine and privately held Versova did not immediately respond to Reuters’ requests for comment.
The lawsuit claims the egg producers coordinated using an industry price-benchmarking service, according to the report.
Friday’s report said the agency and the egg producers could still reach a settlement to avoid litigation.
The Justice Department is also separately investigating the markets for beef, fertilizer and crop seeds, the report added.
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USA
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