Menu

Eggs, Chickens, and ‘Windfall Profit Tax’ Tweets

Claim

A major egg supplier increased profits by 65 percent during the last quarter "to a record-breaking $198 million," as egg prices in the United States skyrocketed.

Rating

True
Like this fact check?

Reporting

Amid concerns about the lack of availability and rocketing prices of eggs, a popular January 15 2023 post to Reddit’s r/SandersForPresident touched on one of the topics contained in public discussions:

We need a windfall profits tax. from SandersForPresident

The post, like the topic, contains several distinct and overlapping elements.

‘Expensive Eggs,’ the Meme

In January 2023, memes and social media discourse frequently touched on the rapidly increasing price of eggs.

On January 11 2023, a user posted to Reddit’s r/OutOfTheLoop, asking about “the deal with egg prices skyrocketing as of late”:

What’s the deal with egg prices skyrocketing as of late? from OutOfTheLoop

On that thread, the top two comments referenced avian flu as a factor:

“Answer: There’s a big bird flu epidemic right now. The birds must be killed when it’s discovered they have it. Over 60 million cases have been discovered as of January 6th [2023].”

“Bird flu spreads so fast they don’t have time to wait for the test results to come back in 1 or 2 days. As soon as 1 dead body is found, they presume the entire farm has already been infected and the entire farm’s birds are killed immediately.”

Elsewhere on Reddit and Imgur, memes about egg prices circulated throughout January 2023:

The good old days. from WhitePeopleTwitter

OK Grandpa, time to go back to bed from memes

I just wanna be able to afford eggs 🙁 from FunnyandSad

Memes about the price of eggs were popular on Facebook. On Twitter, the discussions involved news, debate, and jokes:

Of the tweets, the second included a claim present in Sanders’ tweet about “zero positive cases of avian flu.”

Avian Flu and Egg Prices

A January 12 2023 New York Times article about egg prices and avian flu reported:

One factor behind the shortage and the sharp rise in egg prices is an outbreak of avian influenza, also known as the bird flu, a highly contagious virus that is often fatal to chickens. Since the outbreak was detected last February [2022], more than 57 million birds in hundreds of commercial and backyard flocks have been affected by it, according to the U.S. Department of Agriculture.

Infected or exposed flocks are culled to prevent the virus from spreading, a measure that has resulted in the depopulation of more than 44 million laying hens in the U.S. since the outbreak [was detected in February 2022], according to the Agriculture Department. The depopulations at commercial facilities have decreased the domestic egg supply by about 7.5 percent on average each month since the outbreak began, the department said.

Lyndsay Cole, a spokeswoman with the Agriculture Department’s Animal and Plant Health Inspection Service, said that after facilities are sanitized and restocked with healthy laying hens, it takes about four to five months for them to “reach peak productivity” of about 24 eggs per month.

A similar ABC News report from January 13 2023 explained:

Egg prices peaked during the holiday season [in December 2022], hurting smaller grocery chains that can’t compete with larger chains and leading to price increases for restaurants and other small businesses, experts said. The price increase in eggs also comes as the cost of most foods have increased significantly, putting a strain on grocery shoppers and small business owners alike … Urner Barry, a company that publishes the “fair market price” for items like eggs, meat, and plant proteins, set the wholesale trade value for a dozen “midwest large” eggs at 89 cents on Dec. 22, 2021. A year later, the price for a dozen eggs skyrocketed to $5.46, according to Karyn Rispoli, the editor of Urner Barry’s Egg Price Current. The price beat the previous record high of $3.09 during the pandemic.

Outbreaks of highly pathogenic avian influenza have killed nearly 40 million hens since February 2021, five percent of the U.S. chicken flock, according to a spokesperson for the U.S. Department of Agriculture. Egg production has also declined by 4 percent since 2021, the spokesperson said.

A January 17 2023 Vox.com article reiterated previous reports about avian flu; a CNN article from the same day noted that a large number of snow geese had contracted the illness. News of the sort often avoided firm figures about the effects of avian flu on egg suppliers, but the New York Times linked to a United States Department of Agriculture (USDA) resource, “2022 Confirmations of Highly Pathogenic Avian Influenza in Commercial and Backyard Flocks,” cataloguing confirmed infections across the United States.

A USDA table (most recently updated on January 12 2023) listed “detections” of avian flu in the United States. A column labeled “Birds Affected” provided figures for detected cases by state and supplier.

Record Corporate Profits?

On January 15 2023, Sen. Bernie Sanders (I-Vermont) published the tweet shared to Reddit:

Sanders claimed that the producers of three egg brands increased their profits “by 65 [percent]” in the previous fiscal quarter, raking in “a record-breaking $198 million” but “reporting no positive cases of avian flu.”

Through an unrelated January 16 2022 post to Reddit’s r/mildyinfuriating, we located what appeared to be the source for Sanders’ assertion. On January 13 2023, CNN Business published an article on the topic (“Surging egg prices mean record profits for largest US egg producer”), reporting:

… the leading US egg supplier has found that it can make even more money out of every egg.

The egg shortage has enabled record quarterly profits and sales at Cal-Maine Foods (CALM), the largest producer and distributor of eggs in the United States. The company produces brands such as Farmhouse Eggs, Sunups, Sunny Meadow, Egg-Land’s Best and Land O’ Lakes eggs.

Cal-Maine’s profit increased 65% to $198 million during the three months ended Nov. 26 [2022] from a year ago.

CNN also noted of the supplier (Cal-Maine, or CALM):

… Avian flu has killed more than 50 million birds in the United States since the start of 2022, according to the Centers for Disease Control and Prevention. There have been no positive tests of the avian flu at any Cal-Maine Foods’ facilities … Cal-Maine on December 28 [2022] reported record quarterly sales of $801.7 million, a 110% increase compared with the same quarter [in the previous] year.

CNN referenced a statement attributed to Cal-Maine’s finance chief Max Bowman. On December 28 2022, an egg industry news site published “Cal-Maine Foods Reports on Q2 of FY 2023,” including the excerpted comment. A portion of that statement not quoted by CNN included Bowman’s mention of $198.6 million in “net income”:

In commenting on results for the 1st Quarter of FY 2023, Sherman Miller, CEO of Cal-Maine Foods stated, “We are proud to report another strong quarterly financial and operating performance for Cal-Maine Foods, with record sales and net income for the second quarter of fiscal 2023. These results reflect the current market environment characterized by record average selling prices for conventional eggs, primarily due to reduced supply related to the outbreak in the U.S. of highly pathogenic avian influenza (“HPAI”), and good customer demand …”

Max Bowman, CFO of Cal-Maine Foods of Cal-Maine Foods noted, “Our financial results for the quarter were boosted by a record top line performance of $801.7 million in net sales. Net income of $198.6 million for the second quarter of fiscal 2023 was another Company record. The significantly higher selling prices, our enduring focus on cost control, and our ability to adapt to inflationary market pressures led to improved profitability overall with a gross profit margin of 39.6% for the second quarter of fiscal 2023, another record for Cal-Maine Foods.

Summary

Alongside memes about “expensive eggs” across social media, a January 15 2023 tweet by Sen. Bernie Sanders about a “windfall profits tax” and egg prices began circulating. Sanders claimed that a supplier of three brands increased its profits by 65 percent in the previous fiscal quarter “to a record-breaking $198 million while doubling the price of eggs & reporting no positive cases of avian flu.” The tweet did not include a citation for the figures Sanders referenced.

A January 13 2023 CNN Business article reported that, just as Sanders claimed, supplier Cal-Maine (or CALM) had increased their profit by 65 percent to $198 million in the most recent quarter. CNN referenced a statement, which matched a December 28 2022 egg industry report. In it, Cal-Maine’s Chief Financial Officer mentioned net income of “$198.6 million,” matching Sanders’ tweet.

Article Sources +