Jackson Jambalaya

Remember when egg prices skyrocketed? Well, a wee bit of price-fixing might have had something to do with it.  The Justice Department announced Ridgeland's Cal-Maine and three other egg producers settled price fixing charges. Cal-Maine must pay $1.5 million to several states and donate 30 million eggs to various non-profit organizations.  However, the founding family members of Cal-Maine sold stock for $320 million after learning of the federal probe. 

The Justice Department and seventeen states sued Cal-Maine on June 29 in U.S. District Court in the Northern District of Iowa.  The complaint charged the defendants with violating the Sherman Antitrust Act by working to artificially inflate the daily egg price quotations.  

Urner Berry ias a price reporting agency that coverts market information into a daily price quotation for eggs.  The price quotations are regional (Midwest, NE, SE, South Central, NW, California), and classified by egg sizes.  Market information includes trades, bids, spot market, and offers on the Egg Clearinghouse Inc.  Egg contracts are usually based on prices published by Urner Barry (Think of how the daily LIBOR rate is used to set interest rates for ARM's and other financial products).  

The Justice Department began investigating alleged price-fixing among the defendants in early 2025 in response to egg prices soared to $6.23 for large eggs.  

The complaint claims the defendants conspired to artificially inflate the price quote by using a variety of means such as coordinated purchases or offers that did so.  The Justice Department cited one example to show how the alleged scheme work: 

16. On December 19, 2022, Cal-Maine, Versova, and Hickman’s held a regularly scheduled weekly call in which they discussed Urner Barry’s price quotations. That same day, Hickman’s CEO emailed Defendants, “[n]eed to push the spread into the northwest….” A senior Versova executive replied a few hours later, stating, “[o]ur team will be bidding for additional loads again tomorrow.” Hickman’s CEO then responded, “[i]f we all bid in our respective areas for the 3-5 loads minimum we are short . . . the market reporters will have to address.” Throughout the day, Hickman’s CEO spoke on the phone with that Versova executive, as well as a now-former executive from Cal-Maine.

17. On December 19, Urner Barry increased its price quotations for white, large, shell eggs across all regions. (See p.5 of complaint posted below).

18. Hickman’s CEO repeated his request early the following morning, on December 20, emailing senior executives from Cal-Maine, Versova, and others, stating, “[p]lease consider posting strong bids, early and often. The market reporters don’t get in for another hour, so it will be good for them to see diverse bidding upon logging on.” (Urner Barry is more likely to increase its price quotations if it observes higher bids from a variety of market participants.) Hickman’s CEO later emailed again, stating, “[h]urry[.] There are only 16 bids on ECI right now and 15 of them are ours [Hickman’s bids].” Shortly after that email, all three Defendants collectively submitted dozens of bids on ECI, most of which were at premium prices. By contrast, all other market participants combined submitted fewer than six bids that morning. Following these emails, Hickman’s CEO had several phone calls with an executive from Versova and a now-former executive from Cal-Maine.

19. On December 20, Urner Barry again increased its price quotations for white, large, shell eggs across all regions.

 

The Justice Department alleged more manipulation took place two days later:  

He then joined Hickman’s CEO in asking Defendants to submit bids designed to influence Urner Barry, writing, “[a]s a group we need to bid like they vote in Chicago, early and often.” Hickman’s CEO called a now-former Cal-Maine executive three times throughout the day. Hickman’s CEO repeated the CEO of Cooperative A’s instruction the next morning, emailing senior executives from Cal-Maine and Versova, the CEO of Cooperative A, and others, with the subject “bids,” stating: “[t]here is only a 2 cent premium for NW [Northwest] large over SC [South Central] large” eggs. Hickman’s CEO continued, “[b]id early and often today.”

23. After receiving Hickman’s CEO’s directive to “[b]id early and often,” on December 22, a senior Versova executive told another Versova executive to “light up the northwest bids please."

Prices rose in December from $3.589 for large eggs to $4.25 in December to a peak of $4.823 in January 2023.  

The defendants did not answer the complaint as the plaintiffs submitted a proposed final order for each defendant the same day it filed the complaint.  The proposed order states the defendants agreed to the settlement. 

No action has taken place in court other than attorneys submitted notices of appearance and seeking permission to appear if they practice out of state. 

The Justice Department announced the settlement in a June 30 press release.  Cal-Maine issued its own dueling press release. Both statements are posted below. 

The defendants will pay $3.3 million to the plaintiff states.  Cal-Maine's share of the "payment" will be $1.5 million.  The egg producers will donate 49 million eggs to food banks.  The Ridgeland company's portion will be 30 million eggs. 

Cal-Maine denied "all wrongdoing" and called the federal government's claims baseless. The company said it did not have to pay any fines even though the proposed order states it will pay $1.5 million.  

       

Justice Department Statement 

The Justice Department’s Antitrust Division, together with 17 State Attorneys General, filed a civil lawsuit against Cal-Maine Foods Inc. (Cal-Maine); Hickman’s Egg Ranch Inc. (Hickman’s); and Centrum Valley Holdings LLC, Versova Holdings LLC, and Versova Management Cooperative (Versova) for unlawful coordinated manipulation of egg prices. At the same time, the Department filed proposed settlements that will, if approved by the court, prevent these companies from engaging in such coordinated manipulation in the future.

“No product more quintessentially represents affordability than the price Americans pay for eggs,” said Associate Attorney General Stanley Woodward. “These actions prove this Department’s continued commitment to protecting competition and providing real relief for everyday Americans’ pocketbooks.”

“Food affordability is a top priority of the Antitrust Division,” said Former Acting Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “These settlements resolve years of conduct that dragged on Americans’ finances and their everyday lives. I thank and recognize the dedicated work of the Division’s talented staff and state partners.”

“The Antitrust Division is steadfast in our work to protect our nation’s citizens from illegal conduct that makes daily life less affordable,” said Deputy Assistant Attorney General Nicole Sarrine of the Justice Department’s Antitrust Division. “We are proud that these settlements will keep egg prices competitive and keep money in the hands of consumers across the country.”

Filed in the U.S. District Court for the Northern District of Iowa, the complaint alleges that Cal-Maine, Hickman’s, and Versova coordinated to artificially inflate the daily quotations of Urner Barry Publications, a market reporting company whose publications affect prices that grocery stores, restaurants, and others pay for eggs nationwide.

Defendants produce and sell eggs to grocery stores, restaurants, and other businesses that ultimately sell or provide eggs to American consumers. Defendants and other egg producers also bid to acquire eggs on spot markets, including the Egg Clearinghouse. Urner Barry considers this bidding information when it issues daily price quotations that influence wholesale egg prices. Every year, billions of eggs are sold with prices based on Urner Barry’s price quotations.

As the complaint alleges, Defendants conspired to inflate Urner Barry’s price quotations by agreeing to: (1) submit a large number of bids; (2) cause multiple Defendants to bid in order to signal to Urner Barry that a diverse set of market participants needed to buy eggs; (3) submit a large number of bids in the hours leading up to the publication of Urner Barry’s price quotations; (4) submit bids that were unlikely to lead to executed trades; and (5) execute trades at premium prices.

As the complaint also alleges, egg price quotations dropped significantly from their peak after Defendants learned of the Department’s investigation and were instructed to preserve documents in March 2025.

The proposed settlements result from the Department’s focus on anticompetitive practices that lead to higher food prices. If approved by the court, these settlements will prohibit Defendants from:

• Communicating with competitors regarding bidding strategies and the prices, timing, and number of bids;
• Communicating with competitors regarding certain information about bids, prices, supply, and demand that they may share with a benchmark publication;
• Agreeing with competitors on the number, pricing, or other terms of bids or transactions;
• Communicating with competitors regarding bids or transactions that are not based on legitimate business needs;
• Communicating with competitors regarding bids or transactions that are intended to affect a benchmark publication.

Additionally, the proposed settlements will require that Defendants adopt antitrust compliance programs, appoint antitrust compliance officers, monitor meetings of cooperatives and joint ventures, and report potential violations of the proposed settlements.

The Attorneys General of Arizona, California, Colorado, Connecticut, Florida, Hawaii, Iowa, Maryland, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Texas, Utah, Vermont, and Wisconsin joined the Department in the complaint and proposed settlements. (KF: What? No Mississippi? Where is Lynn?) 

As required by the Tunney Act, the proposed settlements, along with competitive impact statements, will be published in the Federal Register. Any interested person should submit written comments concerning the proposed settlements within 60 days following the publication to Zachary Trotter and John Thornburgh, Acting Chief and Assistant Chief, Chicago Office, Antitrust Division, U.S. Department of Justice, Rookery Building, 209 S. LaSalle St., Ste. 600, Chicago, Illinois 60604. At the conclusion of the public comment period, the U.S. District Court for the Northern District of Iowa may enter the final judgments upon finding they are in the public interest.

Anyone with information about anticompetitive conduct in agricultural industries or any other violations of the antitrust laws is encouraged to contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or antitrust.complaints@usdoj.gov.

Cal-Maine is headquartered in Ridgeland, Mississippi; Hickman’s is headquartered in Buckeye, Arizona; and Versova is headquartered in Sioux Center, Iowa.

Cal-Maine Statement

Cal-Maine Foods, Inc. (“Cal-Maine” or “the Company”) (Nasdaq: CALM) today announced that it has reached an agreement to resolve the claims of the U.S. Department of Justice (DOJ) and 17 states' attorneys general against the Company, subject to applicable approvals and court procedures. The agreement follows a 15-month-long investigation by the DOJ that centered broadly on whether egg producers that had organized a cooperative to supply eggs to customers in compliance with cage-free requirements in certain markets were attempting to manipulate an industry price index by sharing information about bidding activities. Cal-Maine was a member of the cooperative, but exited in May 2024, prior to and unrelated to the initiation of the DOJ’s investigation.

Cal-Maine cooperated fully in the comprehensive review process. The Company denies all wrongdoing and violations of law and continues to believe that such claims are baseless and that its conduct was lawful, appropriate and in the best interest of supplying eggs to the marketplace. Cal-Maine further maintains that the Company's communications cited in the complaint – which were made primarily by a single former employee – did not impact egg prices in any market.

Under the terms of the agreement, Cal-Maine was not assessed any fines or penalties and has agreed to implement certain compliance and reporting measures. With respect to claims by the states’ attorneys general, Cal-Maine agreed to donate 30 million eggs, supplementing its contributions to food banks and non-profits across the country as part of the Company’s long-standing commitment to communities in need. In addition, Cal-Maine agreed to pay a total of $1.5 million to such states to resolve this matter.

“We are pleased that this agreement enables us to move forward so we can devote our full attention to what matters most: delivering affordable, high-quality eggs and egg-based prepared foods to consumers nationwide, while helping ensure a reliable domestic supply of a nutritious, everyday staple that families depend on,” said Sherman Miller, president and chief executive officer of Cal-Maine Foods.

“As farmers, we face extreme variability across supply and demand in dynamic and often unpredictable markets, and the ability to navigate that delicate balance is what makes farmers so valuable to U.S. food security. The period reviewed by the DOJ was a particularly challenging time. Temporary supply shocks, including in connection with multiple outbreaks of avian influenza, the COVID-19 pandemic, weather and other market dynamics – compounded by high inflation at the time – caused egg prices to surge periodically over the past five years.

Miller continued, “In order to help customers avoid empty shelves, Cal-Maine took numerous steps to protect and grow its hen flock during this period, including investing more than $88 million in industry-leading biosecurity since 2015 and significantly increasing the number of total chicks hatched. As bird-health issues resolved and supply recovered, the market has flipped: today, egg supply is higher and wholesale egg prices are now at record lows. We will continue to manage highs and lows to proudly help our customers keep shelves stocked to feed Americans.

Miller concluded, “Our values drive everything we do at Cal-Maine, and being a good partner to our valued customers is core to how we do business. That’s why we regularly review and strengthen the way we work across operations, governance, compliance, and safety. We have robust compliance policies and training in place and hold ourselves to the highest standards.”