Eggs are a $10 billion 'low-margin industry,' says analyst. Here's who profits
Egg prices rose significantly in 2022: Consumers paid $4.30 on average for a dozen Grade A large eggs in December, compared to $1.80 a year earlier, according to Bureau of Labor Statistics data.
But who's profiting from that price difference? It's a complicated answer.
"Everyone tries to make money, but ... it's a very low-margin industry," said Angel Rubio, senior analyst at Urner Barry, a market research firm that specializes in the wholesale food industry.
There were 373 million laying hens around the U.S. as of January, according to the U.S. Department of Agriculture. After hens lay eggs at a farm, they get graded by the USDA and put into cartons, sold to retailers and then purchased by you, the consumer.
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All told, eggs are an about $10 billion dollar industry, with nearly 13% growth annually in profit from 2017 to 2022, according to IBISWorld. But the egg industry is volatile, too, sensitive to market changes and environmental factors. Much of the price increase of eggs over 2022 stemmed from the deadliest outbreak of bird flu in U.S. history, which killed millions of egg-laying hens.
The egg industry also has its fair share of controversy.
"Each bird is given less space than the dimensions of an iPad on which to live her entire life," said Kate Brindle, a senior public policy specialist in farm animal protection at The Humane Society of the United States. "And so they have to eat, sleep, defecate, all in the same area, and they're denied virtually everything that's natural to them."
There are only a handful of big players in the industry. Cal-Maine Foods, the only publicly traded egg producer, holds 16.8% of market share. Like some of the other larger companies, it operates farms, processing plants, hatcheries, feed mills, warehouses, offices and other properties around the country. Cal-Maine Foods reported a nearly 32% increase in revenue from 2021 to 2022.
"It's a testament to the fact that they haven't had any [bird flu] outbreaks, how good they've been at biosecurity in their facilities," said Peter Galbo, a food and beverage analyst for Bank of America. "This is a very experienced, very deep management team that's been in this industry for a long time."
The second largest producer is Rose Acre Farms, with about 7% market share, followed by Versova Holdings and Hillandale Farms with just more than 5% each, and Michael Foods with 3.5%, according to IBISWorld.
So who profits from this $10 billion industry? Watch this video to learn who makes money from eggs.
Correction: Egg prices overall rose 60% in 2022, as measured by the consumer price index. Consumers paid $4.30 on average for a dozen Grade A large eggs in December, compared to $1.80 a year earlier, according to Bureau of Labor Statistics data. Those two statistics were conflated in an earlier version of this article.