U.S. egg producers settle benchmark manipulation claims

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U.S. egg producers settle

Highlights

Cal-Maine, Versova, and Hickman's Family Farms settle DOJ and 17-state claims of manipulating Urner Barry egg benchmark, pending court approval.
Settlement terms mandate cessation of competitor communications about bidding, appointment of antitrust officers, monitoring, and reporting compliance breaches without any fines or penalties.
Companies will donate 53mn eggs to food banks and non-profits, with Cal-Maine contributing 30mn eggs plus $1.5mn, and Versova donating 20mn eggs plus an $800,000 payment.

Settlement terms and alleged bidding conduct

As reported by the U.S. Department of Justice complaint and proposed settlement filed in federal court in Iowa, federal enforcers and attorneys-general from 17 states allege the three producers worked together to manipulate daily quotations published by Urner Barry, a benchmark widely used in supply contracts with supermarkets, restaurants and food-service groups.

The settlement remains subject to court approval and requires the companies to stop communicating with competitors about bidding strategies, prices and transactions intended to influence benchmark publications. The groups must also appoint antitrust compliance officers, introduce monitoring programmes and report potential breaches to regulators.

Prosecutors say the companies used bids on the Egg Clearinghouse exchange, along with off-exchange trades reported to Urner Barry, to create an impression of stronger demand and push benchmark prices higher. In one example cited in the complaint, Hickman’s then chief executive Glenn Hickman emails senior executives at Cal-Maine and Versova in December 2022 urging them to post strong bids "early and often" before Urner Barry reporters begin work.

The complaint says the three companies then submit dozens of bids, most at premium prices, while all other market participants combined submit fewer than six bids that morning. Urner Barry later increases its quotations that day, according to the filing.

Market impact and company responses

Egg prices sit at the centre of one of the most politically sensitive parts of the U.S. food market after successive bird flu outbreaks force producers to cull millions of laying hens and tighten supply. According to Expana, prices for large grade A eggs climb above $8.50 a dozen in February 2025 before falling to about $2.19 in May this year.

Authorities argue the supply shock does not fully explain the price surge, noting that wholesale egg prices drop sharply after news of the Department of Justice investigation emerges in March. The Department of Justice says the benchmark carries major commercial weight because billions of eggs are sold each year under contracts tied to Urner Barry quotations, allowing any artificial increase to flow through to supermarkets, restaurants and consumers.

Under the agreement, the companies will donate 53mn eggs to food banks and non-profit groups across the participating states, including about 4.9mn eggs for organisations serving New Yorkers. Cal-Maine, the largest U.S. egg producer, denies wrongdoing and says the agreement includes no fines or penalties; it says it will donate 30mn eggs and pay $1.5mn to resolve the states' claims.

Sherman Miller, Cal-Maine's chief executive, says temporary supply shocks tied to avian influenza outbreaks, the Covid-19 pandemic, weather and other market dynamics, together with high inflation, cause egg prices to surge periodically over the past five years. Versova says it accepts the settlement to put the matter behind it and focus on its business, and adds that it agrees to donate 20mn eggs over three years and make a one-time payment of $800,000.

In our earlier coverage of the DOJ and 17 states’ antitrust lawsuit over alleged manipulation of Urner Barry benchmark egg prices, we outlined claims that Cal-Maine Foods, Hickman’s Egg Ranch and Versova coordinated bidding to inflate daily quotations used widely in U.S. egg pricing. We also noted that the proposed settlements would restrict competitor communications about bids and pricing, require antitrust compliance programs, and move through a public-comment process before final court approval.

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