So after the surge in prices from normal market forces, they tried to keep prices up by placing high bids on eggs that they never intended to actually purchase. This briefly worked, then the market re-asserted itself and prices cratered. Now, after the fact, the justice department is investigating the bidding shenanigans. Is that a fair summary of the situation?
I guess the thing I'm confused about is how bidding above market rates for eggs didn't just result in these companies being stuck with a bunch of eggs that they grossly overpaid for? How did the scheme actually work?
It sounds like the exchange consumes bids, not just closed transactions. So these companies were basically publishing fraudulent bids that never completed.
I can’t tell from the article if they were bidding on each others eggs or bidding on other farmers eggs and then canceling.
So is the real collusion here the fact that an index like that exists? Why are prices set by a centralized index rather than just normal supply and demand? (Genuinely asking; egg markets are far outside my area of expertise.)
All kinds of commodities are sold on centralized exchanges. With those, however, you can't bid and then not settle the transaction, AFAIK. That's the part that's confusing to me, how can bids that never result in a sale affect prices, at least for very long?
In this case it looks like the price-setting market was the spot market for excess eggs but that market was a small percentage of the overall egg market: the majority of eggs are sold in private, years long contracts that are negotiated to adjust to the prices in that small excess egg market. The vulnerability of this kind of market to manipulation is obvious.
There was also some spoofing which apparently also affected the actual prices because the egg market index was not as sophisticated as stock market indexes are.
There are a lot of market manipulation techniques that follow this type of pattern. Usually the perpetrator does some combination of
1) Putting in the out of market bid and immediately cancelling so the high bid doesn't get filled. Sometimes they might make this bid in small size so it doesn't matter too much if they do get filled (but this only works if the market is relatively thin or illiquid). Depending on the market, you might be able to put order flags or abuse the matching algorithm to make it less likely to be filled even though your order seems to cross the spread. So for example sometimes people will put in an order, cancel and then place it again so they go to the back of the queue at that level for example.
2) Stuffing the order book lower down with (larger) passive sell orders that will get hit as the market followers start bidding up in anticipation of the price move caused by the very high bid.
I'm not as familiar with the regime in the US markets but in UK/EU markets this behaviour is absolutely market abuse and can result in criminal prosecution and disgorgement of profits.
well if you keep reading, the investigation has concluded and they are declining to pursue any charges, alleging that the return of egg prices to pre-collusion levels is the desired outcome. there may be a $3 million fine, which is of course microscopic compared with the profits created from collusion. surely a years-long price fixing conspiracy costing consumers billions deserves more than that, but under this administration we are unlikely to get it.
fair enough, this kind of thing hasn't been a strong suit for a while - I had hopes for Lina Khan but she didn't have the time or backup she needed. but right now is an especially laissez-faire moment when it comes to criminal enrichment
It's likely the cartel was only <1% of the egg price increase. It's good to go after, but it wasn't the main cause of price increases.
Some background for the <1% estimate:
- The fine was for 3M vs a 13B egg market
- The only quotation I could find covering how much the cartel raised prices was "placed bids at a price that was two cents greater" from Matt Levine's piece: https://emailshot.io/p/LKaQi73kHN4uv5sVMUbfSXNQdm3ELgy9j. That's ~1% of the Northwest Large White benchmark price of $5.43
> [Urner Barry] also collects bids that egg producers make for each other’s surplus inventory on an exchange called Egg Clearinghouse, Inc. [It] takes in those bids even before they lead to any sale, as a signal of demand.
> they had the ability to create the illusion of [consumer demand] through bids on the surplus exchange for purchases they had no intent of completing
This seems like a system tailor-made for collision. It seems like the consumer protection agency should force changes. Too bad they've been made toothless.
It's a system that is vulnerable to fraud, which is why it's good to have regulators who go after fraudulent actors.
It's a perfectly fine system if the egg producers are using it genuinely, it's only a problem when they start submitting fraudulent bids to accomplish illegal market manipulation.
> This seems like a system tailor-made for collision. It seems like the consumer protection agency should force changes. Too bad they've been made toothless.
It seems the system was prone to manipulation. Having prices for high volumen transactions be set by low volume transaction in another market looks pretty silly. If they don't fix that there'll be worse troubles than price gouging by the big producers.
"and not even for the lovingly cared-for, cage-free variety"
Which oddly did not increase in price much. I was in a discussion once on a forum and brought up that eggs around me (PNW) were still in the $6 for 18 when everyone else was complaining about $10 for a dozen. Next time I bought eggs, the ones I buy were the same price as always but the normal white eggs were in fact $10 a dozen...
I had the same experience on the east coast-- farmers market eggs continued to be $5-$8/doz (depending on size) even as the normal white eggs raced to $10. I think the "conventional wisdom" was that these small farmers weren't hit by the flu in the way that the big industrial farmers were, and that their living conditions made them hardier or less susceptible. I guess I now assume that these small farms relying on direct sales were simply oblivious to the bidding shenanigans.
I'm also in the PNW. The egg thing seemed weird to me when the local organic eggs didn't budge at all. We had bird deaths in the wild from the flu as well, so I know it was out here.
My friends in the midwest always tell me egg prices have actually never been lower. They've been tracking them for a while now, and they were low during 2014-2020, then had a massive, unexpected jump, then another massive decrease starting 2025. Curious to know what the reasons are here.
Local farms are rarely selling directly to grocery stores. They sell to a number of organic/free range/whatever companies like Vital Farms that aggregate from the smaller farmers and sell to grocery stores (or grocery store suppliers).
At least that is my understanding of the way the scale is managed.
I was mainly reacting to that line which seemed to me a throw away that was never returned too implying: and if normal egg prices are high just think about those more expensive brown eggs. Which is too bad, noticing the higher end eggs not moving much in price might help the general argument of the article...
> There’s a big market (egg producers selling eggs to supermarkets etc.), and there’s a small market (egg producers selling extra eggs to each other on an electronic exchange). The price in the small market determines the price in the big market. Participants in the small market are also participants in the big market. You can spend a little money in the small market to move the price, which can make you a lot of money in the big market.
There is a good story in here about how economics as a profession is intellectually bankrupt. But at the same time, there is also a story about how the only hard data the economics profession can actually offer is actual transactions completed by disinterested, non-colluding, and independent individuals. Supply and demand curves only make sense when there is a genuine conflict between the supply and demand sides. LIBOR-like arrangements, where it's suppliers selling to each other, do not form a valid market because the demand side is also the supply side.
The magic Latin words to ward away CAC farmers[0] are "straight tender-to-tender transaction", aka "you're just moving money around, it's not a real transaction". I am wondering if we need a similar kind of mind-numbing rhetoric to refer to exchanges that are not valid markets: i.e. do not have opposing supply and demand. These exchanges nominally serve some kind of purpose - they balance supply across suppliers - but they should not be allowed to participate in price discovery as they are not a market.
[0] "Customer acquisition costs" refer to any money paid by a business to attract new customers only. A lot of business risk management is put into making sure your customer acquisition costs are not functionally a straight-up discount or giveaway.
> On Wednesday, Hickman saw evidence that Urner Barry was taking in data that would lower prices — “pull the market down,” in the words of one executive — and goaded his erstwhile competitors to respond. “As a group,” the executive followed up, “we need to bid like they vote in Chicago, early and often.”
So while they were actively breaking the law, colluding to screw over the free market, they soothed themselves with jokes about non-existent voter fraud.
> “The reason, in this case, not to pursue litigation is that the conduct had already been resolved, right?” [U.S. Associate Attorney General Stanley Woodward Jr.] went on, referencing the decline in egg prices.
They stopped this particular instance of it after the horse already left the barn and did nothing to dissuade future anticompetitive collusion.
Well, the "something" the Trump adminstration landed on (with an investigation started by Biden's team) I think for OP wasn't enough. A small monetary settlement without jail time of the executives involved is hardly the "something" that needs to be done in order to curtail this behavior and stop it in the first place. When the people who committed a crime still gets to keep any amount of their stolen money, that, to me, is less than "something".
An economist would say profits go to zero if markets are really free. Like if there were no barriers to entry and consumers chose purely on price firms would keep entering and would always be incentivized to lower prices to get the sale.
There are barriers that are natural, like "I already have a relationship with vendor A", or "I really enjoy brand B", "I'll have to invest a lot of money to start this business and I won't do it if it seems unlikely I'll make a profit", etc. Then there are barriers like "we have a patent on this technology", "we own a copyright on this movie", "we control the distribution channels", "we pass laws to get keep out competitors."
Business is all about finding ways to beat the economic constraints and ensure you get a profit!
The best case you can make for our system, in my mind, is that there is competition so that vendors have an incentive to provide good products and services at fair prices. Sure, there has to be enough profit to attract investment, but our system works better for all of us when regulation encourages competition.
There are businesses that are highly profitable even in a commodity market. Profits go to zero on the marginal supplier in a perfect market. Any supplier who has a lower cost base than the marginal supplier is profitable.
The canonical example is oil. It costs about $3 to pull a barrel of oil from the ground and pipe it to port in the best oil fields of Saudi Arabia. OTOH, Canadian tar sands cost $50 to pull out of the ground and another $10+ to get to port. During normal times the natural price of oil is ~$60.
Adam smith was hostile towards monopolies (which your link refers to - nothing to do with price fixing although the conclusion is the same) and his critiques being very apparent throughout Wealth of Nations. This is a common opinion with proponents of free markets.
So what specifically about capitalism makes this a "natural consequence"?
The main feature of capitalism is not free markets, it's capital. And capital accumulates leading to inequality that only ever gets bigger unless we actively take steps against it as a society. Being against monopolies doesn't help if you're not willing to actually punish them.
Free markets are great but to really work they need to come with competition enforcement (including total M&A bans in high risk industries), strong unions, support for worker ownership and a tax structure that rewards productive investment instead of executive payouts. Market socialism instead of capitalism.
Regulation is literally there to compensate for these types of issues with unregulated capitalism. I don't see how you could draw the conclusion that the thing we've tried many times and that works a lot of the time can't work.
if it's not perfect, it's useless or destructive is a pretty common perspective in left-wing groupthink. Some examples are how everyone to the right of a left winger is a republican/fascist/etc or that it's Medicare 4 All or nothing.
I get who you're talking about, and I've encountered those tiresome people. The flavor of the week is that No Kings is a Disneyfied faux protest. This of course ignores the fact that large scale protest in the US attracts police beatings and widespread use of pain compliance techniques if it isn't presented as family friendly.
Avoiding those outcomes while attracting is steadily growing number of protesters, with the most recent attracting 8 to 9 million is in itself a huge accomplishment. Way too big to ignore and within reach of overwhelming numbers.
Which is to say you could've picked a better example than M4A. Holding that up as a minimum expectation is hardly radical.
> Which is to say you could've picked a better example than M4A. Holding that up as a minimum expectation is hardly radical.
I'm not commenting on whether it's radical, just that if they had the choice between something like the ACA and nothing, many in these groups would rather have nothing. In fact, many would argue (as they would against other things they consider "incrementalism") that anything less than their demands would actually be detrimental somehow. Very much in opposition to "don't let the perfect be the enemy of the good". This is exemplified in the whole M4A "force the vote" nonsense.
ACA is garbage. It was created by the Heritage Foundation and started off being called Romneycare. It has worked terribly, and required what is an unconstitutional (in many opinions) fine for people who fail to be able to afford insurance.
The only reason anyone has any pleasant feelings about ACA is because a Medicaid expansion was passed at the same time. Of course I would prefer nothing. ACA stopped the momentum for M4A, as it was designed to do. Forcing the vote was a litmus test that Democrats purporting to understand this failed.
I appreciate you stepping in to be the perfect example of the kind of thinking I'm talking about. People like you are the real enemy of progress and we are very thankful that you are so politically irrelevant.
And your style of thought processes is why the Overton Window is so extreme to conservative to the point of fascism.
I remember WHY the Heritage foundation put together their plan. It was cause Hillary Clinton dared, as first wife, put together a plan for single payer. Republicans howled at it nonstop with complaints of government death panels, and you guessed it, China.
That was also back when republican thinktanks actually put together plans. Terrible ones, sure, but actually had plans, rather than "concepts of a plan" (trumps own words).
Of course, Romney ran with it. It was, as you guessed it, terrible for Massachusetts. And surprise surprise, when the black guy speaks for it it turns into extreme hyper-communism... but it was really just garden variety racism by republicans. But now, we have for-profit insurance death panels.
And no, shlant, when your form of "compromise" entails in a one-way ratchet and your control is whether its slow or fast and not reverse, its not a compromise. Blow this shit up. Plenty of us are done with your idea of compromise oro 'reaching across the aisle' ala obama. It has never worked, since Reconstruction. Just gets worse and worse.
> The flavor of the week is that No Kings is a Disneyfied faux protest.
It's strange to ignore all of the actual criticisms, such as that they are protests with absolutely no demands, and that they're arranged by Democratic Party insiders using spam farms. The reason they're called "No Kings" is because nobody knows what that's supposed to mean. It was consciously concocted as an alternative to fighting the "oligarchs" as Sanders constantly said, because Democrats support oligarchs.
> with the most recent attracting 8 to 9 million is in itself a huge accomplishment.
It's not. They're just faithful movement Democrats walking together in the street trying to figure out different ways to yell "fuck Trump." They're a mockery of protests, they're just extremely ineffective marketing.
They wouldn't be tiresome if they were easy to answer for you. Accusing people of just complaining about people and things not being "perfect" is a sign of somebody who doesn't even have a dishonest argument to make, so they're resorting to making no argument at all, and instead calling you a snob.
> they're arranged by Democratic Party insiders using spam farms
Ah yes, the tried and true "they are paid protestors" shtick. Yawn.
> The reason they're called "No Kings" is because nobody knows what that's supposed to mean.
It's very simple - Trump acts like a king, wielding his power however he wants while ignoring any checks and balances. People are very much against that for obvious reasons.
> because Democrats support oligarchs.
curious what your thoughts are on Elon Musk and DOGE
> trying to figure out different ways to yell "fuck Trump."
Yea there's no reason why anyone would have legitimate issues with Trump as a president.. He certainly doesn't provide new ones on a daily basis
Every socialist I’ve ever met has conceded that capitalism is a great mechanism for wealth generation. Just not for much else humans might value in their societies.
So she can lose more lawsuits related to her anti-silicon valley obsession? I'd rather get someone who is actually objective and takes a holisitic look at every industry.
Her blinders kept her from focusing on truly monopolies and anti-trust behavior like cable and broadbrand providers, regional hospital systems, etc.
She was quite active, which is more than we can be said about some of her predecessors.
Also she was hated by the right people, that's always a good sign.
I guess during one of the last surges the question I had was: Isn't a big egg company damned if they do or don't? If I'm a massive egg farmer in an area that's untouched by bird flu, and I keep my prices low: then I'm the bad guy who's running struggling operations out of business. If I raise my prices to stay in line with those operations, now I'm colluding in some way. If we break up big companies so they don't have the kind of power over the market, we trade lower prices for more resilience since the lowest prices are going to come from the highest scale.
I dunno. It's a weird situation. And eggs are particularly weird because, as the article notes, people are definitely willing to pay more for them; the low prices have less to do with true demand and more to do with competition.
The problem isn’t setting prices in response to market conditions, it’s colluding with other companies to raise prices in unison. That’s what makes something a cartel and that’s what happened here. And I don’t mean raising prices because you saw that someone else did, this was literal phone calls and texts about when prices should go up.
I mean, given a lot of the rhetoric that happens around egg prices, it does seem like setting prices in response to market conditions is a problem to many.
You just read an article describing how egg prices were not set in response to market conditions, and were instead manipulated by egg producers. Are you saying that you think, based on the rhetoric, that in an alternate reality where egg prices were actually increased due to market pressures, that people would still complain? I mean, probably.
The purpose of my first sentence was to establish that I was I bringing in some associated thoughts into an article where some alleged collusion is happening, so it's not correct to read it as an attempted refutation of the article.
If there's actual collusion: sure, that's bad! But to be clear, this is not the total solution to the egg price puzzle; we don't know the extent to which this impacted the market.
I guess I just don't like the idea that every price spike is read as greed, because you lose the ability to tell cartel behavior from a supply shock, and actual bad behavior gets less scrutiny, not more. I'm seeing it in this thread: capitalism bad, republicans bad, khan good, etc. Perhaps I did the same thing in the opposite direction.
> The fear that Huffman and other anti-monopolists share is that companies will read the Justice Department’s pursuit of the defendants not as a cautionary tale but as a how-to manual.
Settlements instead of jail time will only cause this behavior to continue. Economic white collar crimes need far higher punishments it seems when the only downside is you return only some of the higher profits you made.
At this point, "conspiracy theories" (the ones that check out logistically. not the actually crazy ones) are just factual news that made it far to early into the news cycle.
For most of my life eggs were a loss leader and could always be found for under $2 a dozen. Why would they suddenly get the idea to form a cartel? Wasn't it always obvious they should do that? Did they used to be paragons of virtue, then decided to get evil for no reason?
Seems to me there must have been some new incentive structure in place.
Sometimes it all boils down to someone saying "what if" and trying something and seeing if it sticks. I guess the avian flu was a good excuse to hide the crime just like what happens in die hard 3 with the distractions of bomb in schools.
The story covers this. An oligopoly of producers and market makers has formed. Where once there were many small players, now small players are few, and the bulk of egg supply is passing through a few huge producers and brokers.
It is so bizarre to publish a story like this months after the egg cartel has been prosecuted over years, totally exposed, seen its day in court, settled for a big fine.
There are a certain group of people who don't know anything unless it is publicized in certain approved outlets, and they are a problem.
edit: and to be less laconic, if these outlets, which are all owned by plutocrats, all collude to simply not report on a story, you can't convince these people of anything.
big fine? they paid 3 million plus 50 million eggs at cost - they probably made on the order of 2-3 billion on this criminal scheme.
I'm confused by your aspersions. should or should not Politico have written this piece? and what is this group of people, and what "approved" outlets do you refer to? are they the ones who naysaid the allegations to begin with or the opposite? have the conviction to name those you accuse.
IMO price fixing is a lot more common than most people assume. The normal textbook economics say that in a pure commodity market like eggs, the average producer should make near zero profit. There are a few ways to make a profit in these industries, such as economies of scale or innovative use of byproducts, but it is very tough.
On the other hand, price fixing is relatively easy, and as long as the players don’t get too greedy and don’t leave a paper trail, they’re unlikely to be caught. The only way it usually happens is if there is a whistleblower.
The ADM lysine case years ago also threw a lot of cold water on whistleblowers when the whistleblower ended up getting more jail time than any of the other conspirators.
Anyhow, the fact you even see any successful prosecutions given how hard it is prove, and the paradoxical fact that in some commodity industries, you actually do see decent profit margins tells me that this sort of thing is actually probably very common.
Yeah that movie is almost completely unwatchable though. They took this conspiracy story and tried to make it into a zany slapstick comedy. I have no idea what Soderbergh was thinking.
Right it was in fact the embezzlement that originally got him to become a whistleblower. The FBI was investigating the embezzlement, and he told them that he could give them a bigger fish. Anyhow he wore a wire in several price fixing meetings and was generally extremely cooperative with the FBI. I think he embezzled on the order of $10 million from ADM, but the Lysine conspiracy was on the order of a $200 million overcharge to Lysine customers.
Now Whittacre was crazy and unstable, but what the DOJ did by giving him a bigger sentence for the embezzlement than the heads of ADM that he made the case against IMO sent a message that cooperating with the government on a price fixing case is not going to help you.
What the story really says IMO also is that one of the only ways for the government to actually get enough evidence to prosecute these cases is to have someone who is part of the conspiracy that has committed some other crime, and the feds can flip them. That's not going to happen too often.
Ultimately the government also proved that ADM was also part of a completely separate citric acid price fixing cartel involving different players, but the MO was exactly the same mustache twirling crazy conspiracy theorist's dream of the players sitting down together in a hotel conference room dividing up the market.
> The ADM lysine case years ago also threw a lot of cold water on whistleblowers when the whistleblower ended up getting more jail time than any of the other conspirators.
"Whitacre was sentenced to nine years in federal prison for embezzling $9.5 million from ADM at the same time he was assisting the federal price-fixing investigation."
Not that I trust Wikipedia, but I think if the common narrative is wrong it'd probably behoove you to pre-empt it because anyone who looks it up is going to come away feeling deceived by your statement as written.
"Maybe" here is a rhetorical device. We were told by libertarian experts, "there is NO WAY there is collusion. It's bird flu. Duh".
Now, turns out, there was actual price manipulation occurring (Read the article. It's clear what was going on. There were text messages of their criminal conspiracy!) Now the headline is sassily saying "hey, maybe there was price collusion!" This use of "maybe" is a common expression of sarcasm.
I did read the article but as mentioned it is a word salad that weaves these three concepts together, ending up in nothing. What I'm asking is, what is the point of the article?
I wish they didn't use that ambiguous word, though. The evidence seems pretty clear, most most people won't read past the headline and will think there's still doubt.
"It sure looks like there was an egg cartel after all" would give the same rhetorical effect but be much clearer.
There are two types of advocates for efficient markets: the true believers & the people who manipulate markets. The latter create and fund institutes & academic departments stocked with the former to convince and/or intimidate moderately educated people into disbelieving their lyin' eyes.
So after the surge in prices from normal market forces, they tried to keep prices up by placing high bids on eggs that they never intended to actually purchase. This briefly worked, then the market re-asserted itself and prices cratered. Now, after the fact, the justice department is investigating the bidding shenanigans. Is that a fair summary of the situation?
I guess the thing I'm confused about is how bidding above market rates for eggs didn't just result in these companies being stuck with a bunch of eggs that they grossly overpaid for? How did the scheme actually work?
It sounds like the exchange consumes bids, not just closed transactions. So these companies were basically publishing fraudulent bids that never completed.
I can’t tell from the article if they were bidding on each others eggs or bidding on other farmers eggs and then canceling.
Just par for the course. Stock spoofing is rampant, and securities markets are built on "failing to deliver" purchased shares.
https://www.goodreads.com/book/show/57573604-naked-short-and...
https://www.dtcc.com/products-and-services/clearing-settleme...
They buy a relatively small number of eggs at a high price, but the price of the transaction is an input into an index that the larger market uses.
So is the real collusion here the fact that an index like that exists? Why are prices set by a centralized index rather than just normal supply and demand? (Genuinely asking; egg markets are far outside my area of expertise.)
All kinds of commodities are sold on centralized exchanges. With those, however, you can't bid and then not settle the transaction, AFAIK. That's the part that's confusing to me, how can bids that never result in a sale affect prices, at least for very long?
As always with financial markets, the answer is read Matt Levine: https://www.bloomberg.com/opinion/newsletters/2026-07-01/egg... aka https://archive.is/rQCv1
In this case it looks like the price-setting market was the spot market for excess eggs but that market was a small percentage of the overall egg market: the majority of eggs are sold in private, years long contracts that are negotiated to adjust to the prices in that small excess egg market. The vulnerability of this kind of market to manipulation is obvious.
There was also some spoofing which apparently also affected the actual prices because the egg market index was not as sophisticated as stock market indexes are.
There are a lot of market manipulation techniques that follow this type of pattern. Usually the perpetrator does some combination of
1) Putting in the out of market bid and immediately cancelling so the high bid doesn't get filled. Sometimes they might make this bid in small size so it doesn't matter too much if they do get filled (but this only works if the market is relatively thin or illiquid). Depending on the market, you might be able to put order flags or abuse the matching algorithm to make it less likely to be filled even though your order seems to cross the spread. So for example sometimes people will put in an order, cancel and then place it again so they go to the back of the queue at that level for example.
2) Stuffing the order book lower down with (larger) passive sell orders that will get hit as the market followers start bidding up in anticipation of the price move caused by the very high bid.
I'm not as familiar with the regime in the US markets but in UK/EU markets this behaviour is absolutely market abuse and can result in criminal prosecution and disgorgement of profits.
well if you keep reading, the investigation has concluded and they are declining to pursue any charges, alleging that the return of egg prices to pre-collusion levels is the desired outcome. there may be a $3 million fine, which is of course microscopic compared with the profits created from collusion. surely a years-long price fixing conspiracy costing consumers billions deserves more than that, but under this administration we are unlikely to get it.
Sadly, it ain't just the current administration. Try reading about the RealPage rentjacking scandel.
fair enough, this kind of thing hasn't been a strong suit for a while - I had hopes for Lina Khan but she didn't have the time or backup she needed. but right now is an especially laissez-faire moment when it comes to criminal enrichment
It's likely the cartel was only <1% of the egg price increase. It's good to go after, but it wasn't the main cause of price increases.
Some background for the <1% estimate:
- The fine was for 3M vs a 13B egg market
- The only quotation I could find covering how much the cartel raised prices was "placed bids at a price that was two cents greater" from Matt Levine's piece: https://emailshot.io/p/LKaQi73kHN4uv5sVMUbfSXNQdm3ELgy9j. That's ~1% of the Northwest Large White benchmark price of $5.43
The best evidence for the impact is how rapidly and significantly the price dropped when the investigation was announced. You can see it in the second chart here: https://www.thebignewsletter.com/p/crime-pays-the-egg-bandit...
> [Urner Barry] also collects bids that egg producers make for each other’s surplus inventory on an exchange called Egg Clearinghouse, Inc. [It] takes in those bids even before they lead to any sale, as a signal of demand.
> they had the ability to create the illusion of [consumer demand] through bids on the surplus exchange for purchases they had no intent of completing
This seems like a system tailor-made for collision. It seems like the consumer protection agency should force changes. Too bad they've been made toothless.
Yes, non-binding bids that are not actual sales should not signal anything.
It's a system that is vulnerable to fraud, which is why it's good to have regulators who go after fraudulent actors.
It's a perfectly fine system if the egg producers are using it genuinely, it's only a problem when they start submitting fraudulent bids to accomplish illegal market manipulation.
> This seems like a system tailor-made for collision. It seems like the consumer protection agency should force changes. Too bad they've been made toothless.
Elections have consequences. This is one of them.
That's correct. We are reading about this story because of the prioritizations of the current administration.
Circumventing political parties, Matt Stoller is where I learned about this story:
https://www.thebignewsletter.com/t/hatching-a-conspiracy
It seems the system was prone to manipulation. Having prices for high volumen transactions be set by low volume transaction in another market looks pretty silly. If they don't fix that there'll be worse troubles than price gouging by the big producers.
"and not even for the lovingly cared-for, cage-free variety"
Which oddly did not increase in price much. I was in a discussion once on a forum and brought up that eggs around me (PNW) were still in the $6 for 18 when everyone else was complaining about $10 for a dozen. Next time I bought eggs, the ones I buy were the same price as always but the normal white eggs were in fact $10 a dozen...
I had the same experience on the east coast-- farmers market eggs continued to be $5-$8/doz (depending on size) even as the normal white eggs raced to $10. I think the "conventional wisdom" was that these small farmers weren't hit by the flu in the way that the big industrial farmers were, and that their living conditions made them hardier or less susceptible. I guess I now assume that these small farms relying on direct sales were simply oblivious to the bidding shenanigans.
I'm also in the PNW. The egg thing seemed weird to me when the local organic eggs didn't budge at all. We had bird deaths in the wild from the flu as well, so I know it was out here.
Eggs at my Aldi never went much above $3 a dozen. The cage-free, etc hovered around $6 at the worst (normal is around $3-something)
My friends in the midwest always tell me egg prices have actually never been lower. They've been tracking them for a while now, and they were low during 2014-2020, then had a massive, unexpected jump, then another massive decrease starting 2025. Curious to know what the reasons are here.
Which wouldn’t be that odd if the conspiracy theory was true (since your local farms presumably wouldn’t be invited to the price-fixing meetings).
Local farms are rarely selling directly to grocery stores. They sell to a number of organic/free range/whatever companies like Vital Farms that aggregate from the smaller farmers and sell to grocery stores (or grocery store suppliers).
At least that is my understanding of the way the scale is managed.
I was mainly reacting to that line which seemed to me a throw away that was never returned too implying: and if normal egg prices are high just think about those more expensive brown eggs. Which is too bad, noticing the higher end eggs not moving much in price might help the general argument of the article...
Yes, it was collusion.
Reported also here by Matt Stoller:
https://www.thebignewsletter.com/p/crime-pays-the-egg-bandit...
Matt Levine wrote about this in July
> There’s a big market (egg producers selling eggs to supermarkets etc.), and there’s a small market (egg producers selling extra eggs to each other on an electronic exchange). The price in the small market determines the price in the big market. Participants in the small market are also participants in the big market. You can spend a little money in the small market to move the price, which can make you a lot of money in the big market.
“Egg LIBOR was also manipulated” (Paywalled) https://www.bloomberg.com/opinion/newsletters/2026-07-01/egg...
There is a good story in here about how economics as a profession is intellectually bankrupt. But at the same time, there is also a story about how the only hard data the economics profession can actually offer is actual transactions completed by disinterested, non-colluding, and independent individuals. Supply and demand curves only make sense when there is a genuine conflict between the supply and demand sides. LIBOR-like arrangements, where it's suppliers selling to each other, do not form a valid market because the demand side is also the supply side.
The magic Latin words to ward away CAC farmers[0] are "straight tender-to-tender transaction", aka "you're just moving money around, it's not a real transaction". I am wondering if we need a similar kind of mind-numbing rhetoric to refer to exchanges that are not valid markets: i.e. do not have opposing supply and demand. These exchanges nominally serve some kind of purpose - they balance supply across suppliers - but they should not be allowed to participate in price discovery as they are not a market.
[0] "Customer acquisition costs" refer to any money paid by a business to attract new customers only. A lot of business risk management is put into making sure your customer acquisition costs are not functionally a straight-up discount or giveaway.
Yes there is and nobody does anything about it thanks republicans. Bring back Khan.
I like this part of the article.
> On Wednesday, Hickman saw evidence that Urner Barry was taking in data that would lower prices — “pull the market down,” in the words of one executive — and goaded his erstwhile competitors to respond. “As a group,” the executive followed up, “we need to bid like they vote in Chicago, early and often.”
So while they were actively breaking the law, colluding to screw over the free market, they soothed themselves with jokes about non-existent voter fraud.
Chicago has a long and well documented history of corruption and machine politics.
The article explains that the federal and state governments did do something about it.
> “The reason, in this case, not to pursue litigation is that the conduct had already been resolved, right?” [U.S. Associate Attorney General Stanley Woodward Jr.] went on, referencing the decline in egg prices.
They stopped this particular instance of it after the horse already left the barn and did nothing to dissuade future anticompetitive collusion.
By this logic we shouldn't prosecute serial killers, just confront them with evidence to ensure they won't murder agin.
Why punish the murderer when they've already stopped?
Well, the "something" the Trump adminstration landed on (with an investigation started by Biden's team) I think for OP wasn't enough. A small monetary settlement without jail time of the executives involved is hardly the "something" that needs to be done in order to curtail this behavior and stop it in the first place. When the people who committed a crime still gets to keep any amount of their stolen money, that, to me, is less than "something".
You can buy your eggs from Costco which iirc has their own egg operation these days.
Unsure about eggs, but they definitely have their own rotisserie chicken farm and plant.
Story goes that Tyson's chickens were becoming larger and larger and thus Tyson wanted more money.
Costco wants to keep the chicken at $5, so they starter their own plant.
Yes, Tyson chickens are ridiculously large. Whether you are buying them as whole roasters or cut up, they're almost like a small turkey now.
Did they do something similar with the $1.5 hotdogs?
Yes, I think they replaced Hebrew National with their own house brand.
As you probably know the $1.5 hotdog is made possible in part by raising prices on the other menu items.
God bless Costco.
This isn’t really true. Their eggs are purchased from others (same as other Kirkland branding) and the chicken op for rotisserie is only a fraction.
> You can buy your eggs from Costco
If you live near a Costco, you can. The one near me is opening in a week, and I can't wait.
This isn't really something that could be addressed by regulation. It's a natural consequence of capitalism. It's in every industry.
http://concentrationcrisis.openmarketsinstitute.org/
> It's a natural consequence of capitalism. It's in every industry.
The link you posted doesn’t support this claim.
I'd put it this way.
An economist would say profits go to zero if markets are really free. Like if there were no barriers to entry and consumers chose purely on price firms would keep entering and would always be incentivized to lower prices to get the sale.
There are barriers that are natural, like "I already have a relationship with vendor A", or "I really enjoy brand B", "I'll have to invest a lot of money to start this business and I won't do it if it seems unlikely I'll make a profit", etc. Then there are barriers like "we have a patent on this technology", "we own a copyright on this movie", "we control the distribution channels", "we pass laws to get keep out competitors."
Business is all about finding ways to beat the economic constraints and ensure you get a profit!
The best case you can make for our system, in my mind, is that there is competition so that vendors have an incentive to provide good products and services at fair prices. Sure, there has to be enough profit to attract investment, but our system works better for all of us when regulation encourages competition.
There are businesses that are highly profitable even in a commodity market. Profits go to zero on the marginal supplier in a perfect market. Any supplier who has a lower cost base than the marginal supplier is profitable.
The canonical example is oil. It costs about $3 to pull a barrel of oil from the ground and pipe it to port in the best oil fields of Saudi Arabia. OTOH, Canadian tar sands cost $50 to pull out of the ground and another $10+ to get to port. During normal times the natural price of oil is ~$60.
Those numbers have gotta be old-distro prices
> It's a natural consequence of capitalism
Adam smith was hostile towards monopolies (which your link refers to - nothing to do with price fixing although the conclusion is the same) and his critiques being very apparent throughout Wealth of Nations. This is a common opinion with proponents of free markets.
So what specifically about capitalism makes this a "natural consequence"?
The main feature of capitalism is not free markets, it's capital. And capital accumulates leading to inequality that only ever gets bigger unless we actively take steps against it as a society. Being against monopolies doesn't help if you're not willing to actually punish them.
Free markets are great but to really work they need to come with competition enforcement (including total M&A bans in high risk industries), strong unions, support for worker ownership and a tax structure that rewards productive investment instead of executive payouts. Market socialism instead of capitalism.
Regulation is literally there to compensate for these types of issues with unregulated capitalism. I don't see how you could draw the conclusion that the thing we've tried many times and that works a lot of the time can't work.
if it's not perfect, it's useless or destructive is a pretty common perspective in left-wing groupthink. Some examples are how everyone to the right of a left winger is a republican/fascist/etc or that it's Medicare 4 All or nothing.
I get who you're talking about, and I've encountered those tiresome people. The flavor of the week is that No Kings is a Disneyfied faux protest. This of course ignores the fact that large scale protest in the US attracts police beatings and widespread use of pain compliance techniques if it isn't presented as family friendly.
Avoiding those outcomes while attracting is steadily growing number of protesters, with the most recent attracting 8 to 9 million is in itself a huge accomplishment. Way too big to ignore and within reach of overwhelming numbers.
Which is to say you could've picked a better example than M4A. Holding that up as a minimum expectation is hardly radical.
> Which is to say you could've picked a better example than M4A. Holding that up as a minimum expectation is hardly radical.
I'm not commenting on whether it's radical, just that if they had the choice between something like the ACA and nothing, many in these groups would rather have nothing. In fact, many would argue (as they would against other things they consider "incrementalism") that anything less than their demands would actually be detrimental somehow. Very much in opposition to "don't let the perfect be the enemy of the good". This is exemplified in the whole M4A "force the vote" nonsense.
ACA is garbage. It was created by the Heritage Foundation and started off being called Romneycare. It has worked terribly, and required what is an unconstitutional (in many opinions) fine for people who fail to be able to afford insurance.
The only reason anyone has any pleasant feelings about ACA is because a Medicaid expansion was passed at the same time. Of course I would prefer nothing. ACA stopped the momentum for M4A, as it was designed to do. Forcing the vote was a litmus test that Democrats purporting to understand this failed.
Didn't Trump get rid of said fine in his first term?
I appreciate you stepping in to be the perfect example of the kind of thinking I'm talking about. People like you are the real enemy of progress and we are very thankful that you are so politically irrelevant.
And your style of thought processes is why the Overton Window is so extreme to conservative to the point of fascism.
I remember WHY the Heritage foundation put together their plan. It was cause Hillary Clinton dared, as first wife, put together a plan for single payer. Republicans howled at it nonstop with complaints of government death panels, and you guessed it, China.
That was also back when republican thinktanks actually put together plans. Terrible ones, sure, but actually had plans, rather than "concepts of a plan" (trumps own words).
Of course, Romney ran with it. It was, as you guessed it, terrible for Massachusetts. And surprise surprise, when the black guy speaks for it it turns into extreme hyper-communism... but it was really just garden variety racism by republicans. But now, we have for-profit insurance death panels.
And no, shlant, when your form of "compromise" entails in a one-way ratchet and your control is whether its slow or fast and not reverse, its not a compromise. Blow this shit up. Plenty of us are done with your idea of compromise oro 'reaching across the aisle' ala obama. It has never worked, since Reconstruction. Just gets worse and worse.
> The flavor of the week is that No Kings is a Disneyfied faux protest.
It's strange to ignore all of the actual criticisms, such as that they are protests with absolutely no demands, and that they're arranged by Democratic Party insiders using spam farms. The reason they're called "No Kings" is because nobody knows what that's supposed to mean. It was consciously concocted as an alternative to fighting the "oligarchs" as Sanders constantly said, because Democrats support oligarchs.
> with the most recent attracting 8 to 9 million is in itself a huge accomplishment.
It's not. They're just faithful movement Democrats walking together in the street trying to figure out different ways to yell "fuck Trump." They're a mockery of protests, they're just extremely ineffective marketing.
They wouldn't be tiresome if they were easy to answer for you. Accusing people of just complaining about people and things not being "perfect" is a sign of somebody who doesn't even have a dishonest argument to make, so they're resorting to making no argument at all, and instead calling you a snob.
this is not a serious rebuttal.
> they're arranged by Democratic Party insiders using spam farms
Ah yes, the tried and true "they are paid protestors" shtick. Yawn.
> The reason they're called "No Kings" is because nobody knows what that's supposed to mean.
It's very simple - Trump acts like a king, wielding his power however he wants while ignoring any checks and balances. People are very much against that for obvious reasons.
> because Democrats support oligarchs.
curious what your thoughts are on Elon Musk and DOGE
> trying to figure out different ways to yell "fuck Trump."
Yea there's no reason why anyone would have legitimate issues with Trump as a president.. He certainly doesn't provide new ones on a daily basis
Every socialist I’ve ever met has conceded that capitalism is a great mechanism for wealth generation. Just not for much else humans might value in their societies.
wealth is pretty good at being a vehicle for other things humans value
> Bring back Khan.
So she can lose more lawsuits related to her anti-silicon valley obsession? I'd rather get someone who is actually objective and takes a holisitic look at every industry.
Her blinders kept her from focusing on truly monopolies and anti-trust behavior like cable and broadbrand providers, regional hospital systems, etc.
Because winning against the wealthiest people in the world is easy right?
I think you have blinders on because she challenged both those groups.
If you don't occasionally fail, you're not trying hard enough.
The perfect is the enemy of the better. What we have now is sure not the better.
She was quite active, which is more than we can be said about some of her predecessors. Also she was hated by the right people, that's always a good sign.
Of course there's an Egg Cartel.
There's lime, avocado, milk, oil and corn cartels. Why not eggs?
I guess during one of the last surges the question I had was: Isn't a big egg company damned if they do or don't? If I'm a massive egg farmer in an area that's untouched by bird flu, and I keep my prices low: then I'm the bad guy who's running struggling operations out of business. If I raise my prices to stay in line with those operations, now I'm colluding in some way. If we break up big companies so they don't have the kind of power over the market, we trade lower prices for more resilience since the lowest prices are going to come from the highest scale.
I dunno. It's a weird situation. And eggs are particularly weird because, as the article notes, people are definitely willing to pay more for them; the low prices have less to do with true demand and more to do with competition.
The problem isn’t setting prices in response to market conditions, it’s colluding with other companies to raise prices in unison. That’s what makes something a cartel and that’s what happened here. And I don’t mean raising prices because you saw that someone else did, this was literal phone calls and texts about when prices should go up.
I mean, given a lot of the rhetoric that happens around egg prices, it does seem like setting prices in response to market conditions is a problem to many.
You just read an article describing how egg prices were not set in response to market conditions, and were instead manipulated by egg producers. Are you saying that you think, based on the rhetoric, that in an alternate reality where egg prices were actually increased due to market pressures, that people would still complain? I mean, probably.
The purpose of my first sentence was to establish that I was I bringing in some associated thoughts into an article where some alleged collusion is happening, so it's not correct to read it as an attempted refutation of the article.
If there's actual collusion: sure, that's bad! But to be clear, this is not the total solution to the egg price puzzle; we don't know the extent to which this impacted the market.
I guess I just don't like the idea that every price spike is read as greed, because you lose the ability to tell cartel behavior from a supply shock, and actual bad behavior gets less scrutiny, not more. I'm seeing it in this thread: capitalism bad, republicans bad, khan good, etc. Perhaps I did the same thing in the opposite direction.
Consumers complain about higher prices. News at 11.
The issue is not the complaining, it’s the illegal behavior.
> The fear that Huffman and other anti-monopolists share is that companies will read the Justice Department’s pursuit of the defendants not as a cautionary tale but as a how-to manual.
Settlements instead of jail time will only cause this behavior to continue. Economic white collar crimes need far higher punishments it seems when the only downside is you return only some of the higher profits you made.
At this point, "conspiracy theories" (the ones that check out logistically. not the actually crazy ones) are just factual news that made it far to early into the news cycle.
That article was one hell of an eggsplanation.
*one shell
For most of my life eggs were a loss leader and could always be found for under $2 a dozen. Why would they suddenly get the idea to form a cartel? Wasn't it always obvious they should do that? Did they used to be paragons of virtue, then decided to get evil for no reason?
Seems to me there must have been some new incentive structure in place.
Sometimes it all boils down to someone saying "what if" and trying something and seeing if it sticks. I guess the avian flu was a good excuse to hide the crime just like what happens in die hard 3 with the distractions of bomb in schools.
The story covers this. An oligopoly of producers and market makers has formed. Where once there were many small players, now small players are few, and the bulk of egg supply is passing through a few huge producers and brokers.
It is so bizarre to publish a story like this months after the egg cartel has been prosecuted over years, totally exposed, seen its day in court, settled for a big fine.
There are a certain group of people who don't know anything unless it is publicized in certain approved outlets, and they are a problem.
edit: and to be less laconic, if these outlets, which are all owned by plutocrats, all collude to simply not report on a story, you can't convince these people of anything.
big fine? they paid 3 million plus 50 million eggs at cost - they probably made on the order of 2-3 billion on this criminal scheme.
I'm confused by your aspersions. should or should not Politico have written this piece? and what is this group of people, and what "approved" outlets do you refer to? are they the ones who naysaid the allegations to begin with or the opposite? have the conviction to name those you accuse.
IMO price fixing is a lot more common than most people assume. The normal textbook economics say that in a pure commodity market like eggs, the average producer should make near zero profit. There are a few ways to make a profit in these industries, such as economies of scale or innovative use of byproducts, but it is very tough.
On the other hand, price fixing is relatively easy, and as long as the players don’t get too greedy and don’t leave a paper trail, they’re unlikely to be caught. The only way it usually happens is if there is a whistleblower.
The ADM lysine case years ago also threw a lot of cold water on whistleblowers when the whistleblower ended up getting more jail time than any of the other conspirators.
Anyhow, the fact you even see any successful prosecutions given how hard it is prove, and the paradoxical fact that in some commodity industries, you actually do see decent profit margins tells me that this sort of thing is actually probably very common.
Google tells me the whistleblower in that case was jailed for massive embezzlement, not for whistleblowing. Do you have reason to think this is false?
Are we talking about Mark Whitacre? He was a piece of work. His whistleblowing was legitimate but the massive embezzlement was also legitimate.
The Soderbergh film The Informant! starring Matt Damen is about that story.
https://www.youtube.com/watch?v=U-in7L8AmU4
Yeah that movie is almost completely unwatchable though. They took this conspiracy story and tried to make it into a zany slapstick comedy. I have no idea what Soderbergh was thinking.
Right it was in fact the embezzlement that originally got him to become a whistleblower. The FBI was investigating the embezzlement, and he told them that he could give them a bigger fish. Anyhow he wore a wire in several price fixing meetings and was generally extremely cooperative with the FBI. I think he embezzled on the order of $10 million from ADM, but the Lysine conspiracy was on the order of a $200 million overcharge to Lysine customers.
Now Whittacre was crazy and unstable, but what the DOJ did by giving him a bigger sentence for the embezzlement than the heads of ADM that he made the case against IMO sent a message that cooperating with the government on a price fixing case is not going to help you.
What the story really says IMO also is that one of the only ways for the government to actually get enough evidence to prosecute these cases is to have someone who is part of the conspiracy that has committed some other crime, and the feds can flip them. That's not going to happen too often.
Ultimately the government also proved that ADM was also part of a completely separate citric acid price fixing cartel involving different players, but the MO was exactly the same mustache twirling crazy conspiracy theorist's dream of the players sitting down together in a hotel conference room dividing up the market.
> The ADM lysine case years ago also threw a lot of cold water on whistleblowers when the whistleblower ended up getting more jail time than any of the other conspirators.
"Whitacre was sentenced to nine years in federal prison for embezzling $9.5 million from ADM at the same time he was assisting the federal price-fixing investigation."
Not that I trust Wikipedia, but I think if the common narrative is wrong it'd probably behoove you to pre-empt it because anyone who looks it up is going to come away feeling deceived by your statement as written.
lightbulbs, eggs... is there something about the shape that inspires people to protect it to no end? or the fragility?
There's a 10% chance that eggs will end humanity, so let's just take a breath and slow down all of this talk about eggs.
Politico likes to skip between narrative, anecdote, and data.
The title uses the word Maybe. What does this mean in legal terms exactly?
"Maybe" here is a rhetorical device. We were told by libertarian experts, "there is NO WAY there is collusion. It's bird flu. Duh".
Now, turns out, there was actual price manipulation occurring (Read the article. It's clear what was going on. There were text messages of their criminal conspiracy!) Now the headline is sassily saying "hey, maybe there was price collusion!" This use of "maybe" is a common expression of sarcasm.
I did read the article but as mentioned it is a word salad that weaves these three concepts together, ending up in nothing. What I'm asking is, what is the point of the article?
Strictly speaking, the point of the article is to drive clicks for ad revenue and the title was optimized to do just that.
I wish they didn't use that ambiguous word, though. The evidence seems pretty clear, most most people won't read past the headline and will think there's still doubt.
"It sure looks like there was an egg cartel after all" would give the same rhetorical effect but be much clearer.
>most people won't read past the headline and will think there's still doubt
Sadly, changing headlines won't solve functional illiteracy, in this case, the belief that the headline is the story.
The entire US economy is stagnating and spiraling because cartels control most activity now.
There are two types of advocates for efficient markets: the true believers & the people who manipulate markets. The latter create and fund institutes & academic departments stocked with the former to convince and/or intimidate moderately educated people into disbelieving their lyin' eyes.
Price collusion does not support efficient markets.
So we need some sort of regulators to ensure efficient markets?
I mean, yea?
I think efficient markets and unregulated/totally-free markets are separate dimensions, no?