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Comment by falcolas

2 years ago

It's amusing to point out eggs as some kind of holy grail of how price moves naturally, when the two largest egg producers (Cal-Maine Foods and Rose Acre Farms) were just fined in federal court for price fixing.

16 comments

falcolas

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anigbrowl  2 years ago

That's interesting and sort of amusing, but I didn't notice as I buy from fairly small farms.

It's not that I think eggs are immune to price fixing, but rather that the packaging of fresh eggs isn't easy to change; the eggs themselves can't be altered and while you could sell fewer of them per box consumers (in the US at least) are used to multiples of 6 and would immediately notice. In contrast you could reduce the volume of, say, detergent but redesign the container, and many consumers might not notice that they were getting 6-7% less.

What I'm getting as is that while the causes of egg price changes might be legit or greed, it isn't as easy to hide the price changes from the consumer as when you operate a whole production line and can alter the appearance and volume of the package itself.

  • jrs235  2 years ago

    You don't even need to redesign (resize) the packages (boxes, think laundry detergent or cereal). Just fill them up with 5-10% less and only change the printed weight/volume. If the package doesn't transparently show the product inside it's not as obvious.

autoexec  2 years ago

Because they're such total dicks, here are some Cal-Maine brands I go out of my way to avoid when I get eggs in stores:

  4grain cage free
  Egglands Best
  Farmhouse Eggs
  Land O Lakes
  Fassio Egg Farms 
  Rocky Mountain Eggs
  Red River Valley Egg Farm
  Meadowcreek foods
  Specialty Eggs Inc
  Southwest Specialty Eggs Inc
  ProEgg Inc.
  American Egg Products Inc. 
  Texas Egg Products LLC
  Wharton County Foods
  Benton County Foods
  Sunups 
  Sunny Meadow

breakyerself  2 years ago

They're just the ones who got caught. A lot of markets have only 2 or 3 major players. With so few players they could cooperate to raise prices without doing anything more than observe what each other are doing and responding accordingly. Price being the only means of communication or coordinating between the players.

Aunche  2 years ago

Kelloggs, General Mills, and Nestle hired lawyers that appealed to populism to convince jurors that egg producers price fixed with a probability of at least 51%. That's hardly proof of price fixing.

  • falcolas  2 years ago

    > finding that the egg suppliers had exported eggs to cut supply in the US market, as well as limiting the number of hens, reducing flocks and killing chickens earlier than they usually did.

    It was sufficient proof to convince a full jury, which makes them guilty of price fixing. They can certainly appeal, that's how the court process works. It's how all trials in the US work.

    Also, I have to take issue with the insinuation that these egg producers are the underdogs with a small business budget for lawyers themselves. They're the largest egg producers in the US with billions of dollars worth of assets.

    • gruez  2 years ago

      > > finding that the egg suppliers had exported eggs to cut supply in the US market, as well as limiting the number of hens, reducing flocks and killing chickens earlier than they usually did.

      Going back to your prior comment:

      >It's amusing to point out eggs as some kind of holy grail of how price moves naturally, when the two largest egg producers (Cal-Maine Foods and Rose Acre Farms) were just fined in federal court for price fixing.

      I mean, prices did move naturally. The egg producers reduced supply and price went up "naturally". In the case of covid "greedflation", you don't really need an explanation to explain the reduced supply and/or increased demand: covid and stimulus checks explain the situation pretty well.

    • Aunche  2 years ago

      > It was sufficient proof to convince a full jury, which makes them guilty of price fixing.

      Sure, but it's still the lowest burden of proof. My point isn't to make Cal-Maine the underdog. It's to point out the irony that anticapitalists will suddenly trust capitalists 100% whenever they say something that agrees with them, regardless of the motivations of such a claim. It's like when people use Microsoft's antitrust lawsuits as evidence as that all billionaires can't be trusted, yet they're completely uncritically accepting arguments made by lawyers who represented other billionaires.

      Of course the market is perfectly efficient, but 90% of the time it is, especially for commodities like eggs. It may be the case that this is getting worse, but no it is not possible for companies to suddenly decided to be greedy in 2021.

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