US Egg Producers Reach Pricing Probe Deal

What happened: Three major U.S. egg producers—Cal-Maine Foods, Versova, and Hickman's Egg Ranch—reached settlements with the Department of Justice and 17 states on June 29, 2021, to resolve allegations of price-fixing. The companies agreed to pay a total of $3.3 million and donate 53 million eggs to settle claims that they colluded to artificially raise egg prices, including during the record highs of 2020.

Market impact: The egg industry and retailers are affected, with consumers potentially seeing lower egg prices due to the settlement. The agreement may also impact the companies' earnings, as they've agreed to pay a significant fine and donate a substantial number of eggs. However, the settlement allows the companies to avoid potentially larger fines and reputational damage from a prolonged legal battle.

What to watch next: On August 3, 2021, Cal-Maine Foods is scheduled to report its fiscal fourth-quarter earnings. This will be the first earnings report since the settlement and may provide insights into the financial impact on the company. Additionally, the U.S. Department of Agriculture's monthly Eggs and Egg Products report, released on the third Friday of each month, will continue to provide data on egg prices and supply, indicating if the settlement has had an impact on the market.