Saturday, October 7, 2023

Where is Bernie Sanders with the Eggs?


From the article The Egg-Price Narrative Gets Scrambled by Aaron Back (Wall Street Journal - Heard on the Street, October 4, 2023):

Back in January, after a particularly good quarter on the back of surging egg prices, Sen. Bernie Sanders tweeted of the company, without using its name, that “Corporate greed is the producer of Egg-Land's Best, Farmhouse Eggs & Land O'Lake Eggs, increasing its profits by 65% last quarter to a record-breaking $198 million while doubling the price of eggs & reporting no positive cases of avian flu.”

Now the chickens have come home to roost—literally. Cal-Maine reported late Tuesday that egg production has recovered from the avian flu outbreak of 2022, which caused the deaths of nearly 58 million poultry in 47 states. Egg prices have collapsed as a result. Cal-Maine said its average selling price for eggs fell to $1.59 a dozen in its fiscal first quarter, compared to $2.28 a year earlier.

The company’s revenue in the quarter fell 30% from a year earlier. At the same time, though, labor and other costs have remained elevated, including expenses incurred to guard against future avian flu outbreaks. As a result, it posted an operating loss of $6.76 million, compared with an operating profit of $163.9 million a year earlier.

Yet another Economics


Where is Bernie Sanders now?

Is it yet another case of a clueless socialist living in the real world of capitalism? Another case for us to make fun of the like of Bernie Sanders?

Hardly! Mr. Sanders is a seasoned politician and knows what he is doing. Anything he says fits his brand of politics.

And what he says is very helpful. Yes, Cal-Maine increased the price of eggs due to a good business reason: the avian flu outbreak. However, without socialist politicians that issued alarmist sound bites, Cal-Maine as a good capitalist, will capitalize on this reason to tag on a little more than necessary profit - never let a crisis go to waste.

In Doc Ngu's Inexorable Law Of The Feedback Equation, the increase in price due to the avian flu is the forward equation, and the damping feedback equation is the socialists' and activists' alarms. All is well and good in the capitalist world.

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