Vital Farms raises egg prices ‘reluctantly and in small quantities’: CEO

news7f01/29/2023

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Vital Farms raises egg prices 'reluctantly and in small quantities': CEO

Important Farms (VITL) CEO Russell Diez-Canseco said the recent spike in egg prices, an increase of nearly 60% over the previous year, is “a head scratcher.”

“Throughout 2022 we have certainly seen the impact of inflation on our key inputs like the cereal we feed our girls. [hens] and the diesel fuel that truckers use to fuel their trucks when they deliver eggs to grocery stores,” Diez-Canseco told Yahoo Finance. with price increases is to raise prices reluctantly in small quantities.”

A spokesperson for Vital Farms told Yahoo Finance that the company raised the price of eggs last year. “For example, the core 12-figure black carton retail price has increased from $5.99 to $6.99 and is generally reflected in most retailers by the end of 2022.”

The National average for a dozen large, Grade A, eggs was $4.25 in December 2022, up from $1.79 last year.

Diez-Canseco told Yahoo Finance he waits for a valuation given Vital Farm’s long-term mission.

“The reality is that we’re building a long-lasting brand, and we’ve been increasing supply year after year for 15 years straight. We don’t see short-term supply and demand shocks as an opportunity to just make money. our profits and that’s not how we’re operating.”

Senator Reed accuses giant egg producers of cutting prices

Vital Farms works with approximately 300 family farms across eight states in the South to produce large, pasture-raised Grade A eggs.

“We exclusively buy eggs from those farms, and they sell them to us separately on multi-year contracts. The price we pay them is predictable to them and we raise the price as the price of grain increases. growing so they don’t get flipped upside down and stuck paying the bills for the inflation we’re seeing, the end result is that we have a fairly reliable supply of eggs for our business, Diez-Canseco explains.

That business model is different from Cal-Maine Foods (CALMED), the leading egg producer and distributor in the United States, was recently accused of dumping by Senator Jack Reed (D-RI). a letter he wrote to the Federal Trade Commission (FTC).

said reed yahoo finance“I think what’s happening is that the big egg producers—not the locals, because they’re still harvesting the eggs in backyards or small plots and then selling them for a fair price—but one These big companies are basically exploiting the upside. It’s gone up, like you say, 138%. Inflation is much lower than that, so it’s not inflation.”

Cal-Maine Foods did not respond to Yahoo Finance for comment, but it did a statement on its website.

“Many factors have played a role in increasing egg prices, most notably the recent impact of highly pathogenic avian influenza (HPAI), which has significantly reduced the national supply of hens, while demand from consumers for eggs with shells are still good,” the statement read in part. .

However, Reed insists bird flu is not a current problem for these producers. “Basically, what they’re doing is keeping production levels up and just raising prices because it’s a necessity. Families need eggs. It’s just a part of people’s daily lives.”

In response to Reed’s comments, the CEO of Vital Farms said: “I don’t see anything in my cost structure that would drive me up in price as much as you’re reporting. We just took it. price just enough to keep themselves whole and continue to pay our farmers an adequate profit for the work they do I don’t ask anyone to cut prices… I can’t explain why Why is the price going up as high as they have.”

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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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