U.S. federal prosecutors have accused three major egg producers of colluding to artificially inflate egg prices during periods of avian influenza outbreaks between 2022 and 2025. The Justice Department, along with 17 state attorneys general, filed a complaint this week alleging that Cal-Maine Foods, Versova Foods, and Hickman’s Egg Ranch engaged in coordinated bidding practices designed to manipulate wholesale egg prices.

The investigation centers on the companies’ conduct amid historic egg price increases driven publicly by industry executives attributing surging costs to supply disruptions caused by bird flu outbreaks. While the avian influenza led to the culling of tens of millions of hens and resulting scarcity, prosecutors contend that behind the scenes the companies worked together to exploit the situation by submitting bids that kept prices artificially high.

According to court documents, executives at Cal-Maine and rival producers exchanged text messages encouraging each other to place strong, premium-priced bids in the wholesale market, which relied in part on the benchmark price quotations published by Urner Barry. These bids frequently remained unfilled or were later canceled, suggesting they did not reflect genuine demand but rather were intended to pressure pricing services to raise their quotes.

For example, in late 2022, despite no recorded avian influenza cases at Cal-Maine-owned or contracted facilities, the company’s top executives coordinated with Hickman’s to submit elevated bids that made up a substantial share of market offers, helping to maintain price levels. Similar activity was alleged to have recurred through 2023 and into early 2025, including private trades at premium prices reported to Urner Barry to prompt higher benchmark updates.

Despite the public narrative that elevated prices solely reflected supply shortages, internal communications reviewed by prosecutors indicate the companies were closely monitoring, and intervening in, market mechanisms to keep prices from falling. This conduct contributed to Cal-Maine’s substantial financial gains during the period. The Mississippi-based company reported quarterly gross profits reaching $356 million in late 2022 and paid out dividends more than 40 times higher than the prior fiscal year, despite only modest increases in sales volume.

The American Egg Board, representing the industry, has maintained that rising prices were driven exclusively by the avian flu crisis, with its president stating that any suggestion of collusion is a misinterpretation of the facts. Urner Barry, the pricing service affected, said it was not a party to the investigation and affirmed its commitment to independent reporting.

Under a proposed settlement announced alongside the complaint, the three producers have agreed to donate 53 million eggs to food banks and nonprofits and pay $3.3 million to participating states. The firms are also barred from communicating with competitors about bids, pricing strategies, or transactions intended to influence benchmark prices. The settlement now awaits court approval.

Cal-Maine and Versova have denied any wrongdoing, asserting that their pricing reflected lawful responses to disease outbreaks, the COVID-19 pandemic, weather events, and inflationary pressures. Hickman’s, acquired in 2024 by Mantiqueira USA, attributed the alleged conduct to the period before the acquisition.

The Justice Department’s case highlights the challenges of distinguishing legitimate market responses to supply shocks from anti-competitive behavior in essential food supply chains. Observers caution that such manipulation ultimately burdens consumers with higher prices and undermines trust in the agricultural market.