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Some of the country's biggest egg producers have settled a complaint that they artificially raised prices in recent years. As part of a deal with the Justice Department and more than a dozen states, the companies agreed to donate more than 50 million eggs to food banks around the country. They will also pay more than $3 million. Prosecutors touted the settlement. Critics say it's not all it's cracked up to be. NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: Consumers squawked in recent years when egg prices went through the roof. The major driver was bird flu, which wiped out tens of millions of egg-laying hens. But the Justice Department and attorneys general in 17 states say that's not the whole story. They argue that a handful of major egg producers deliberately pushed prices even higher by making exaggerated bids to a market clearinghouse called Urner Barry. Companies like Urner Barry that collect and publish food prices have come under scrutiny in recent years. Livestock economist David Anderson of Texas A&M University says transparent price information is crucial to making markets work, but it also has the potential to be manipulated.
DAVID ANDERSON: There has been an argument that - does that data signal to other players in the market what their competitors are doing, and then can that be used as a way to collude?
HORSLEY: Retail egg prices peaked in March of last year, and since then, they've tumbled more than 40%. That price drop is partly the result of a mild flu season, which allowed the flock of egg-laying chickens to rebound. But Angela Huffman, who heads a watchdog group called Farm Action, notes that last March is also when the government put egg producers on notice. Their pricing is under scrutiny.
ANGELA HUFFMAN: Once they filed an investigation, prices dropped. So we suspect that these companies kind of ran back home with their tail between their legs, you know, and realized they couldn't get away with it any longer.
HORSLEY: Still, Huffman's disappointed. She notes the $3.3 million payment in the settlement is a tiny fraction of the egg company's profits during this period and not likely to be much of a deterrent.
HUFFMAN: This isn't making it right for consumers. You know, what are we getting back?
HORSLEY: The egg producers - Cal-Maine Foods, Hickman's Egg Ranch and Versova - did not admit to any wrongdoing. Cal-Maine says it did its best to keep supermarkets stocked with eggs during a difficult time. Economist Anderson says there's now such a glut of eggs on the market, many farmers are losing money.
ANDERSON: We've had weeks with wholesale egg prices that are probably below egg producers' production costs. But, you know, markets oftentimes overreact both up and down, trying to respond to these signals.
HORSLEY: Anderson says if egg producers are fixing prices, they're not very good at it. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
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