According to the report, Alyssa Vescio, Whole Foods’ senior vice president of merchandising of center store, said that shoppers were increasingly scrutinizing food prices and making shrewd buying decisions as stores struggle to offer customers better deals. Industry researchers have reported that the Amazon-owned chain saw an 8% drop in store traffic in the fourth quarter of 2022 as compared to a year prior.
The most recent consumer price index (CPI) report from the Bureau of Labor Statistics showed the price for US goods increased by an average of 6.5% over a year prior - its sixth straight month of decrease after the Federal Reserve began increasing interest rates in early 2022. However, the rate remains higher than the Fed’s goal of 2% inflation, so the central bank is likely to make further rate hikes following its meeting later this week.
According to manufacturers and shippers, the stiff price hikes have been a product of rising shipping costs, most especially the high price of fuel. However, a decline of gasoline and crude oil prices in recent months has not seen a concomitant decline in commodity prices, many of which have continued to rise despite the overall inflation statistics.
The December CPI report showed the price of eggs increased by 60% over the last year, and increased by 11.1% just from November to December 2022. Breakfast cereal, rice, and bread have also risen by 13-15%. Rent was also 8.3% higher than the same period last year - a devastating metric for working-class Americans, for whom rent is often their single largest expense.
An April study by the Economic Policy Institute found that corporate profits accounted for 54% of inflation in the US over the previous two years, meaning companies increasing their prices because consumers expected price increases has caused inflation to be twice as bad as it otherwise would have been.
Indeed, accusations were recently levied by farmers that major egg suppliers have colluded to artificially drive up prices.
Egg Prices and Avian Flu
A letter sent earlier this month to the Federal Trade Commission (FTC) by Farm Action, a farmer-led advocacy group, urged the agency to investigate “concerns over apparent price gouging, price coordination, and other unfair or deceptive acts or practices by dominant producers of eggs,” most especially corporate giant Cal-Maine Foods.
Alleging that an outbreak of avian influenza among the US chicken population has had and “apparently mild impact on the industry,” Farm Action writes that “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%.”
“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: eggs,” the letter states. “They did so without any legitimate business justification. They did so because there is no ‘reasonable substitute’ for a carton of eggs. They did so because they had power and weren’t afraid to use it.”
Cal-Maine Vice President and Chief Financial Officer Max Bowman told US media in response to the allegations that the US egg market is “intensely competitive and highly volatile even under normal circumstances,” adding that the company doesn’t sell directly to consumers or set retail prices.
The US Department of Agriculture has reported the avian flu outbreak has killed 43 million egg-laying hens in the US since February 2022, resulting in a 7.5% decline in egg supplies per month.
“The average shell-egg price was 267% higher during the week leading up to Christmas than at the beginning of the year and 210% higher than the same time a year earlier,” the USDA said. “During the last week of 2022, inventory sizes started to rise, and prices fell. Going forward, wholesale prices are expected to decrease as the industry moves past the holiday season and continues rebuilding its egg-laying flocks.”