The largest egg producer in the United States saw profits surge 718% last quarter.
That’s not a typo.
Cal-Maine Foods managed to more than double its revenue and rake in $323 million in profits, up from less than $40 million a year ago. That wasn’t totally unexpected, but it easily topped investors’ forecasts.
The reason? No surprise here, egg prices are sharply higher. And while some companies have had to raise prices to offset losses from a supply shortage, Cal-Maine, which controls 20% of the US egg market, said in its earnings report that it had no positive tests for avian flu at any of its facilities. That means Cal-Maine is doing what a lot of major companies are doing right now, jacking up prices because they can.
(Cal-Maine didn’t respond to a request for comment.)
This trend is called “greedflation” and it’s hardly unique to food producers. As my colleague Nicole Goodkind writes, US profit margins have expanded to levels not seen since the end of World War II.
Customers now expect price rises because they read about inflation in the news, wrote Société Générale’s global strategy economist, Albert Edwards. Companies have “clearly taken advantage of rising inflation expectations” and have increased their prices even as their costs have remained the same.
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