The Egg Industry Is A $10 Billion Industry With A Low-Profit Margin. Who Can Profit From It?

There has been an increase of 60% in the price of eggs since 2022: Consumers paid $4.30 on average in December for a dozen eggs in comparison to $1.80 a year earlier. In spite of that price difference, who's profiting from it? The answer to this question is a bit complicated.

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Everyone tries to make money, but the truth is that… this is a very low-margin industry," said Angel Rubio, a senior analyst at Urner Barry, a market research company that specializes in wholesale food distribution.

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The U.S. Department of Agriculture estimates that there are 373 million laying hens around the country. The eggs that are laid by hens on farms are graded by the USDA and then put into cartons where they are sold to retailers, which then in turn are sold to consumers who purchase them.

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From 2017 to 2022, egg profits are expected to grow nearly 13% annually, according to IBISWorld. As with other industries, the egg industry is also volatile, as it is sensitive to changes in the market and environmental factors. Over the course of 2022, egg prices in the United States are expected to increase substantially as a result of the deadliest outbreak of bird flu in the history of the country, which killed millions of egg-laying chickens.

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As with any industry, the egg industry is not without controversy.

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“On average, each bird is given a space that is smaller than the dimensions of an iPad for the entire course of her life,” said Kate Brindle, a senior public policy specialist in farm animal protection at The Humane Society of the United States. “Consequently, they eat, sleep, and defecate in the same area and are denied virtually all of their natural needs.”

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The industry is dominated by a small number of big players who dominate the market. Among the publicly traded egg producers, Cal-Maine Foods holds 16.8% of the market share, which is the highest in the industry. This company, like some of the other larger companies around the country, owns and operates farms, processing plants, hatcheries, feed mills, warehouses, offices, and other properties on a national scale. During the period of 2021 to 2022, Cal-Maine Foods reported an increase in revenue of nearly 32% over the previous year.

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According to Peter Galbo, a food and beverage analyst for Bank of America, “It’s a testament to their ability to maintain biosecurity in their facilities, the fact that they haven’t had any outbreaks of [bird flu].” Galbo goes on to say that this is an experienced, very deep management team that has a lot of experience in this industry.

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The second largest producer, Rose Acre Farms, has a market share of about 7%, followed by Versova Holdings and Hillandale Farms, each of which has a market share of more than 5%, and Michael Foods, which has a market share of 3.5%, according to IBISWorld.

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