Record-Breaking Egg Profits Prompt Accusation of Price Gouging | Hacker News Reader

Record-Breaking Egg Profits Prompt Accusation of Price Gouging

modernfarmer.com

186 pointsmyshpa172 comments

> Cal-Maine’s gross profit jumped 10-fold from one 26-week period in 2021 to the same period in 2022, according to the company’s most recent quarterly financial statement. For the 26-week fiscal period ending in November 2021, gross profits were $50.4 million. In 2022 for the same period, gross profits were $535.3 million.

This is pretty damning especially given the more deadly avian flu of 2015 did not cause prices to rise so significantly.

Collusion of the biggest producers would also explain why the more expensive eggs at the store did not rise as much as the cheaper brands.

This really isn't damning at all. Egg supply was hit hard by the bird flu, while demand didn't change. In order to keep the shelves stocked prices necessarily must go up, but the suppliers costs didn't change. Surprise surprise, charging more for your product leads to increased profits. Egg demand is quite inelastic, so reducing quantity demanded by just 10% could easily force prices to double as we have seen, which would explain the large profits. If prices hadn't increased you wouldn't be able to buy eggs. Is that really better? There simply are not enough eggs to satisfy demand at last years prices.

The fancy egg prices weren't affected as much because those chickens live in better conditions and are therefore less likely to fall victim to a flu outbreak.

Maybe it isn't collusion, but aren't you just describing price gouging? Some unfortunate act of god event happened that either spiked demand or caused supply to drop. As a response sellers increased prices to a level that many can no longer afford.

So which system would society rather have to allocate a limited resource? First come first serve? Person who can pay more? Physical fights? A lottery?

There is no single answer, but the more essential an item is the less accepting society is with "Person who can pay more" approach. Eggs are one of the more fundamental ingredients in the diets of many Americans.

Yep, price gouging is just regular market-based pricing but when it occurs during an emergency. Why some people think it mysteriously stops being a good system during times of emergencies is beyond me.

>Why some people think it mysteriously stops being a good system during times of emergencies is beyond me.

It's pretty simple: this 'self-regulation' is most harmful to the people who are most vulnerable during emergencies. The rich always have a lot more options to deal with scarcity.

But if that's true, isn't it also true in times of non emergencies? This just seems like an argument against market pricing in general.

That is the dirty little secret of price gouging laws. It is just the system acting as normal so labeling that behavior as immoral is basically an indictment of the entire economic system.

Increased pricing signals the issue to consumers who would otherwise be unaware though, that's why it generally works. I don't know the technical definition of price gouging, but I typically associate it with something that consumers NEED, i.e. Hurricane comes through and wipes out 20% of homes, hotels raise prices when people are literally stranded == gouging. Raising eggs prices... wouldn't people just not buy / buy less eggs? (That's what we chose). Seems like that would also keep supply from bottoming out as quickly.

I can't find it now, but I read somewhere that CalMaine had managed to mostly escape getting avian flu in its own birds. So it would make sense that their profits would dramatically increase if the price of eggs goes way up b/c of bird flu, but they can still sell the same number of eggs b/c their birds are not sick/dead. That explanation wouldn't require collusion, just normal supply and demand in a competitive market. (Cold comfort if you're poor and can't afford eggs anymore, though.) You could argue it's price-gouging, but, well, they're a public for-profit company. They're pretty much required by their shareholders to price-gouge when they can do so legally.

And of course it could be some of this (legal), but also some amount of collusion to fix prices (likely illegal).

I heard the same.

At some point, price gouging laws apply.

But below that point, if one company takes steps to prevent bird flu in their flocks, then they get rewarded when all the other flocks get bird flu.

Rather than looking at one company who managed to do well in the situation, I'd be curious to know what happened to overall egg producer revenues. If they went up, there's likely price gouging going on. If they went down or stayed the same, well, that's bird flu, and this company did well by planning for the future.

But if the supply went down, presumably they have fewer eggs to sell or higher costs thus making less profit, right? But since they are making record profit, that seems to imply that the rise in prices is not tracking directly with the drop in supply, but that someone in the chain is artificially raising prices to profit off the perceived lack of supply.

One company had increased profits, not the industry at large.

That one company happened to be one that invested a bunch of effort in preventing bird flu from infecting their flocks.

The article is low on specifics. This company may be "the largest" but how big is that? They could still be less than 5% of the market. If sufficient other farms had high levels of chicken death due to bird flu, it makes sense that the farms that did not would do well, while still tightly constraining supply.

It’s about elasticity of supply versus demand. If the supply shock reduces supply by 10% and prices increase by 11% then revenue would be unchanged. But if consumers don’t substitute in the face of that 11% increase then prices will continue to climb, increasing profits to more than they were before the shock.

That doesn't necessarily track for me. Supply decreases while demand remains constant or rises, sure you charge more per unit. But you also ship fewer units. So why is it a given that the profit margin or overall profit amount would increase? In fact, if that were the case wouldn't it mean that they were previously underpricing their eggs?

You say

> Egg supply is quite inelastic

But right before that you say

> Egg supply was hit hard by the bird flu

Then you say

> reducing demand by just 10% could easily force prices to double

I’m totally confused. Are you mixing up supply and demand?

fixed, thanks

It’s still not correct tho. Now it says that if demand drops by 10%, that means price goes up. But that should be the opposite of what happens.

Demand curve is unchanged, quantity demanded changes as prices change.

yeah, what's really amazing is how 'they' go after all these companies for 'profits' yet no one says a damn thing about Moderna's 65% profit margin (after paying taxes). And this isn't on top of small numbers, they are taking home ~13 Billion$ per year on ~20 b.

Forget Moderna, how about the very businesses that people posting on this forum benefit from?

Their lifestyle being made possibly by the 20%+ consistent profit margins from businesses that have relatively little risk from natural world events, from the safety of working behind a keyboard.

Not that software and hardware businesses do not have risks and are earning disproportionate profit margins, but the idea that businesses with risks such as viruses killing their whole supply or multi billion dollar oil rigs sinking could not also require sufficiently profit margins to attract investment.

High profit margins aren't a problem when there is a significant value add. Moderna is taking extremely inexpensive bulk chemicals and turning them into much more valuable finished medicines. Of course there is significant capital cost - research, equipment, dealing with regulatory bodies, etc but once all that is paid for pharma is basically a money printer.

would you put all your retirement savings in moderna stock then ?

would I? I wouldn't. Why not?

I think something is going to happen that I am not allowed to talk on social media about, otherwise I would do just that.

edit: see, just the very mention of it gets me downvoted.

> This is pretty damning especially given the more deadly avian flu of 2015 did not cause prices to rise so significantly.

Does anybody have a some historic record of egg supplies and sales? I'd be curious how 2015 lines up with now.

If prices didn't increase you could allocate eggs by lottery, or limit quantities. Some stores did limit quantities.

Charging more for a product to allocate demand doesn't necessarily increase profits. If the profits aren't invested to raise production at the remaining farms, e.g. if supply is inelastic, which it might be in the short run (raising new chickens at farms that got bird flu would take just as long as at healthy farms, you can't force existing chickens to lay more eggs, etc.), then the profits ought to be rebated back.

In fact, retaining profit can be a sign of price gouging. It means you've run into inelastic supply and there's no place to spend that money to solve a short-run problem. On the other hand, maybe they'll reinvest it next year or over the long term into expansion, and you might want to reward investors and management at well run farms; but if this flu is a freak accident of nature where equally run farms might get it or not, then no.

The aforementioned company doesn’t appear to have been affected by the shortage like others. In the article it says they sold similar numbers of eggs the previous year. So they benefited from other businesses losing supply.

I think government intervention in the face of short term supply shocks such as what we’re seeing here make sense. The lack of them isn’t the same as price gouging though. Food rationing is incredibly unpopular politically so it’s not surprising that it didn’t happen here.

After watching the oil companies rake everyone over the coals why wouldn't every greed board abuse consumers. We have no consumer protections and half of our legislative branch is filled with obstructionist who have no interest in helping consumers and the other half is filled with people who only pay lip service to helping consumers.

This feels to me like a case where the market should sort it out - I would think there would be enough competition in the egg industry that it should be difficult to gouge.

The avian flu definitely got rid of some of that pricing pressure, but for what it's worth, the issue seems to be resolving itself. Wholesale egg prices are down 50% from their peak. Anecdotally, I've been able to get a dozen eggs at Sprouts for $3.25-3.50 for about a month (this is in San Diego, so something like $2.49-2.99 was normal pre-pandemic and $5.99 with largely empty shelves was normal two months ago).

> This feels to me like a case where the market should sort it out - I would think there would be enough competition in the egg industry that it should be difficult to gouge.

If all of the large producers are in on it, then the market would not be able to sort itself out. It would be a trust situation.

As the article states, competition is decreasing due to acquisitions by egg producers.

> This feels to me like a case where the market should sort it out - I would think there would be enough competition in the egg industry that it should be difficult to gouge.

Nope. Always Late Inventory(tm) means that no upstream supplier has any excess capacity.

So, even if you wanted to drop prices a bit and gain some customers, you can't. Your upstream supplier can't give you 10% more eggs because they are capacity constrained as well. Lather, rinse, repeat at every level.

Everything in the US is a monopoly now, everything.

Market correction requires a free and open market which doesn't exist.

> After watching the oil companies rake everyone over the coals

What i don't understand is that why don't oil company stocks don't reflect these record profits. exxxon stock seems to be at 2014 levels.

If we know oil companies are price gouging then why won't we just buy those stocks and get in on the action.

Stock price is only very loosely related to short term profits. Stock price reflects people's expectation of what people would be willing to pay for those stocks at some future point in time. If a company has done something to fundamentally make itself more profitable, like getting rid of some inefficiency or adding some capability, that could be a good sign it will be more valuable in the future. However a brief surge in profits from a rare event that can not be readily replicated gives no indication that the stock is a good investment.

This is not a rare event though. These 'price gouging' events happen very often. you can certainly count on them happening every few years.

And they always have been. The volatility of goods have been factored into the price already. If there is some reason to believe the volatility is going to change in the long term that could affect price, but again a spike like this is not indicative of a long term trend.

> CFO Max Bowman attributed the monopolist's good fortune to "significantly higher selling prices" and "our ability to adapt to inflationary market pressures." Cal-Maine's stock is up 47% from a year ago – a record high.

From eggspensive thread. I think this is the first egg 'price gouging' event in my lifetime. Its the opposite of 'long term trend' that you say is necessary for stock price bump.

You can't simultaneously argue that price gouging events are rare and not rare. Pick one.

I was referring to the volatility of oil being factored into the price which is why Exxon Mobile's stock doesn't go up significantly when the price of oil goes up.

> You can't simultaneously argue that price gouging events are rare and not rare.

Why not though. It can be rare in some industries( eggs) and not rare in others(oil & gas). Why would there a be universal price gouging rule that applies to every industry.

> I was referring to the volatility of oil being factored into the price which is why Exxon Mobile's

Thats what i am asking you why is not factored into Cal-Maine's stock but factored into Exxon's stock.

The first part you wrote is the answer to the second part.

You answered your own question.

"Because EXXON stock seems to be at 2014 levels."

Because when people research a business’s prospects for the purposes of investing their own money, they come to incorporate other information such as profit margins and volatility into their analysis.

They are super happy to pay that lip service while saying "look, we're the reasonable ones here, can't do anything cause of the other guys!" and reap the profits.

This sounds like Murc's Law [0]

[0] https://www.lawyersgunsmoneyblog.com/2017/12/great-moments-m...

Of course, this is not really a useful (or provable) criticism as long as the actual obstructionists are obstructing! Much more useful to oust the obstructionists, then you can work on holding the alleged lip-servicers accountable.

Also, supporting candidates who refuse corporate and PAC money

Regarding that last point, if it wasn't for the relentless media coverage, I wouldn't even have noticed that prices went up. The price that the milk-and-eggs home delivery service charges hasn't changed (organic, free-range, access to outdoors), and the pasture-raised certified humane eggs at Costco still cost the same.

You’re buying the top end and are not price sensitive. This isn’t a criticism, but I would wager you dont feel a $1 increase in most groceries at all, compared to someone who has to choose between that item and heating their homes.

My free range eggs just plain didn't go up in price. In fact, I couldn't get them for a while because they were the same price as the low quality battery hen eggs and everyone just bought the good ones.

It's not a matter of price sensitivity - the top end hasn't changed prices.

Have they not? I buy pasture raised eggs which at my local Whole Foods used to be $5.99/dozen and lately have been $7.99/dozen. Granted, the $5.99 was cheaper than my other local grocery store, where they've been $7.99 all along (and I'm not sure what they've been charging recently).

I also only have anecdotes, but the prices of prices for free range eggs near me has been stable around $6/dozen for a long time.

According to this they did: https://www.shefinds.com/collections/shoppers-crying-costco-...

The prices they're citing there aren't "top end," they're store brand.

You're almost there, keep thinking

Literally everything manufactured got more expensive in 2022. Everything.

Why would eggs be any different? It's not like they pop out of the chicken and land on your plate - there's a ton that goes into getting them into the store just so you can buy them.

Assuming egg production didn't experience significant cost increases seems precarious without evidence.

It's in the food industry - which suffered some of the most draconian restrictions on personnel and safety measures available at the time. For all we know, half of that cost increase could have gone to just sheets of plastic to hang all over the place and single-use disposable masks, gloves, boot coverings, hair nets and more that all had to be changed several times per day.

It's not Price Gouging simply because we don't like it folks...

> Collusion of the biggest producers would also explain why the more expensive eggs at the store did not rise as much as the cheaper brands

No, not at all. It simply indicates the more expensive brands had enormous margins before covid and were able to keep pricing more stable against rising costs.

Your cheap brands had nowhere to go, except raise prices when costs increase. This is so obvious and basic, it's weird it needs to be said.

Additionally, government policies don't happen in a vacuum folks. Policies made it difficult to produce and manufacture, and shocker - prices went way up. This is not rocket science...

The profit increased drastically. Profit is the part they keep after expenses. That it increased so drastically is price gouging. And such drastic price going should only be possible with collusion whether explicit or tacit due to too few competitors.

You're citing Gross Profit, not Net Profit - which is being used here by the article deliberately to emphasize their point.

The net shows an increase as well, but not totally out of line with the increase in sales and costs, even when we look back several years.

A simple google search for cal-maine profit margins produces a table that includes year over year change in many metrics. For example Year over year increase in net profit margins:

Feb 2022: Y/Y net profit margin is +119.63%

May 2022: Y/Y net profit margin is +1633.06%

Aug 2022: Y/Y net profit margin is +442.88%

Nov 2022: Y/Y net profit margin is +7890.32%

How does that lead to the 10x increase in profits (not revenue) cited by OP?

Someone is playing fast and loose with the word "profit".

The claimed amounts are gross profits - which do not account for majority of a company's overhead expenses, such as personnel, insurance, compliance, etc... ie. the things that increased in cost the most during covid.

Net Profit would be far more interesting, but even there we would expect an increase if prices were raised due to costs. It just won't be as sensational as the number currently being tossed around.

Not to mention we're comparing data to 2021, which had most things shut down. A better comparison would be to compare to 2019...

I'm not sure that lines up with the result. If costs go up, profit as a percentage should stay stable. Why would their profit go up 10 fold???

That is what makes it gouging. The profit margin was greatly increased through potential collusion and/or unfair pricing for what they correctly perceive as an inelastic good.

What profit margin should they have and why should they have that profit margin?

https://www.macrotrends.net/stocks/charts/CALM/cal-maine-foo...

> For the 26-week fiscal period ending in November 2021, gross profits were $50.4 million. In 2022 for the same period, gross profits were $535.3 million.

They had a near zero profit margin for 2021. And based on their record of profit margins, it seems like their business has been volatile since 2015 or so.

I am not an expert on the egg business or food in general, but there is no reason that a 10x increase in profit has to mean malfeasance.

Volatile businesses can have large swings in profit margin, otherwise no one would want to do them.

Why do people shill for corporations?

Nobody was complaining about low egg prices when Cal-Maine was reporting losses and meager profit margins in 2017 and 2019 to 2021.

But that is beside the point that there is no set nominal “appropriate” profit margin for a given business.

That does not mean that businesses with high profit margins are not colluding, or corrupt, or acting in ways that should be illegal.

But it also means you cannot simply conclude from a few quarters of higher profit margins that a business is behaving unethically.

What are you talking about? Egg producers reported that avian flu affected supply, so they made employees wear, "hair nets ... changed several times per day"?

Watch the movie The Informant. It's a true story and we only know it happened because one guy was trying not to go to jail. What's happening now is nothing new.

> why the more expensive eggs at the store did not rise as much as the cheaper brands.

Recently, I was stunned to find that the cheapest eggs in my area, by far, were at Whole Foods. Order of $2-$3 less per dozen than at other supermarkets.

Same here in DC area. Whole foods has the cheapest eggs. Strange times!

I've been eating the premium blue eggs at my store because they didn't increase their price at all.

Even though it's still a little more than a normal dozen, it's well worth it since they taste better.

> Collusion of the biggest producers would also explain why the more expensive eggs at the store did not rise as much as the cheaper brands.

Why would that be the case?

Because smaller independent and family farms aren’t colluding?

But they are already more expensive. Does that mean they were colluding previously?

Couldn’t you argue that their pricing is more inflation resistant as their margins already allow for fluctuations in eg fuel prices?

Or their costs are a lot higher. When you don’t pack the chickens in a dense a space, you have more expensive feed, and you have a lot less chickens in the first place, then I’d expect it to cost a lot more.

Their costs are higher as it is more expensive to raise chickens using their methods. So one would expect these eggs to be more expensive.

their costs are almost certainly not higher in proportion to their costs. There is almost without a doubt a premium because the people that they are selling to are not price sensitive.

> their costs are almost certainly not higher in proportion to their costs.

Do you mean “their costs are almost certainly not higher in proportion to their profits.” I’m struggling to understand.

>But they are already more expensive. Does that mean they were colluding previously?

how is that your conclusion?

I don’t think that. I’m trying to understand why the parent comment thinks high priced eggs meant no collusion in the past, but means collusion now.

So your best guess as to why small-farm pastured eggs are more expensive must be that they colluded? It's because they cost more - how is that not obvious? How did you skip past that to the other is what everyone was wondering.

It seems the 2015 flu was limited to the US, while this one has hit Europe and Asia hard too. The global markets might have softened 2015s price impact, see how exports from US dropped and imports increased: https://www.statista.com/statistics/196095/us-total-egg-impo...

With very little additional detail, this says it's worse than 2015: https://foodinstitute.com/focus/bird-flu-cull-surpasses-2015...

Cal-Maine had an unusually bad year the previous year, lost money one quarter and made a few million on 1.5 billion revenue. Cal-Maine was not affected by avian flu and many of their competitors were. They had a good year in '22.

I'm open to either possibility.

It also seems completely possible to imagine a scenario where 15% of all eggs set to be produced never get maid. If you are a producer who had no damage to your chickens you are now getting bids in from grocery stores and areas that had never contracted you - and your profits increase.

My local Trader Joe's was out of eggs yesterday. Presumably because prices have actually gone down and people are hoarding. But nonetheless, stores definitely were selling out because the prices actually did not reflect demand.

How is it damning if it's gross profits? If eggs get 5x more expensive, and you sell the same amount of eggs, shockingly, you will now have 5x gross profits, no?

Eggs don’t just get 5x more expensive on their own. Competition should keep gross margins in a mean-reverting band over periods of time.

You're right, sometimes a bird flu kills off a lot of egg producing hens, which results in less eggs around

Except the article pointed to a previous outbreak where prices didn’t go up as much.

The profit margin isn’t that insane relative to other industries.

“egregious profits reaching as high as 40%” (from the article).

Eggs would, presumably, get 5x expensive because the cost to produce the eggs cost has gone up 5x. However, it obviously has not if there are record-setting profits.

More than likely the cost to produce an egg has only gone up 1.4x and the greedy corporations have raised prices 5x and stoked a media narrative that costs have increased 5x.

No, they presumably got 5x more expensive because half the flock died. If taiwan was invaded and TSMC's factories destroyed chip prices would skyrocket too, not because Intel and Samsung's costs have increased, but because there are more people competing for their limited supply of fabs. The alternative is everyone who used to use TSMC chips being shit out of luck and having to close up shop until new fabs can open.

If fab supplies are limited, some people will be SOL anyway even if prices rise. It's not like higher prices are magical and mean that everyone who needs something will get it. It's just that those who do buy at inflated prices will get reamed.

> It's not like higher prices are magical and mean that everyone who needs something will get it.

That's exactly what it means... If you create a product that adds enough value that people still want it with the high prices you'll be able to afford space at the remaining fabs. Low value add products will stop being produced until supply catches up. Yes, the TSMC customers will displace some of Intels/Samsungs, but the most important products will continue to be made.

You’re assuming that producing an egg costs 5x more in 2022 than 2021. I can’t think of any input cost increase that could account for a 5x production cost. A hatchery takes in chicken feed and spits out eggs (and macerated male chick slurry), it’s a pretty simple business.

Chicken food comes from corn, wheat, oats, some fish. It’s delivered by truck.

The cost of fertilizer is at record highs. The cost of fuel has increased.

I’m not justifying the exact increases but supply chains are never simple, especially in the modern economy.

A lot of chickens died for those eggs you ungrateful consumer

Most elite HN CPA.

Why didn't they collude in 2015?

Surely it is every America's ambition to be a millionaire using the free market and some elbow grease. So how is this a problem? Shouldn't the high price just magically cause more egg factories to be built? :-)

But if there is a cartel then that should be addressed regardless of the prices they charge.

Of course there doesn't need to be a cartel for the prices to be artificially high; if demand is high enough and nearly fixed then none of the producers will need to reduce prices in order to keep the sales volume high. Not all of them will chase higher market share at the risk of reduced margins.

You can quickly get historical data on egg prices from the Fed:

https://fred.stlouisfed.org/series/APU0000708111

That last spike, in 2015, seems to correspond with the deadliest highly-pathogenic avian flu outbreak to date at the time.

The spike before that in 2008? Another HPAI outbreak.

The consolidation the advocacy letter to the FTC mentions was already in place in 2015, wasn't it? Why did prices fall back after the HPAI epidemic (to levels lower than before it, in fact)? If it's all price fixing, why is it cyclic?

Why does the price spike when it should lower; aren't people spooked by the deadly disease?

The whole floor gets slaughtered with only a single infection usually... So the price hike occurs because there are a lot less hens laying eggs, as they've all been killed and burned (sick chickens can't be sold for meat either).

It's pretty macabre if you think about it

Ah, that explains it. Thanks.

All the laying hens die.

Can someone ELI5 me the difference between price gouging, and a high priced supply/demand curve equilibrium point?

The headline says "price gouging", but I can't find the term in the body of the article.

The claim actually assessed seems to be "record-breaking increases in the price of eggs [are caused] by price collusion among the nation’s top egg producers."

Collusion and price gouging are pretty different concepts as far as I know. It's somewhat hard to apply the 'price gouging' concept here -- a central example of price gouging would be to charge high prices for fuel or accommodations after a hurricane. It's easy to see the appeal of the concept (people are in a lurch and have few options to trade off with, making it very painful) in the natural disaster example, but that isn't the usual case with eggs.

On the other hand, not allowing very high prices for fuel in the aftermath of a hurricane is a good way to make sure nobody ever stockpiles fuel especially to be available after a hurricane.

You're like 99% of the way there. This is the behavior you want. The alternative is panic shortages from people afraid prices are about to skyrocket.

>You're like 99% of the way there. This is the behavior you want. The alternative is panic shortages from people afraid prices are about to skyrocket.

Forcing prices to be low has the opposite problem: since the cost of stocking up is low, everybody does so. If you're at the grocery store and there's a hurricane approaching, why wouldn't you stock up on some non-perishable foods? After all, worst case scenario you pay a bit more than you would have (assuming you only buy stuff on sale), and you can consume them over time, so the net cost to you is very low. Of course, if every shopper stocks up for 2 weeks worth of perishables, the shelves will be empty within an hour.

Just like hate speech can be any thought that I disagree with, price gouging is when anyone other than me or my friends increases their price.

I know this might be taking the bait but please find some actual academic sources on hate speech. You're letting the very people who want to dismiss policies that limit hate speech because it's just wrongthink define it as wrongthink.

You can hold and express the most offensive vile opinions on any subject you can imagine without it being hate speech. Don't let the very worst of people convince you that their hate speech is the same you holding or expressing minority or counterculture opinions on controversial topics. It's just a tactic to get normal people to defend them becasuse "they're coming for you too."

>I know this might be taking the bait but please find some actual academic sources on hate speech.

What do you propose should be the legal definition of hate speech then? And why do we need it as a separate category compared to existing laws (eg. existing laws against threats)?

Any of these work for you? And because hate speech isn't a direct threat of violence.

The UN: Any advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence shall be prohibited by law.

Canada: Every one who, by communicating statements in any public place, incites hatred against any identifiable group where such incitement is likely to lead to a breach of the peace. Every one who, by communicating statements, other than in private conversation, wilfully promotes hatred against any identifiable group. Everyone who, by communicating statements, other than in private conversation, wilfully promotes antisemitism by condoning, denying or downplaying the Holocaust

Germany: Whoever, in a manner suited to causing a disturbance of the public peace incites hatred against a national, racial, religious group or a group defined by their ethnic origin, against sections of the population or individuals on account of their belonging to one of the aforementioned groups or sections of the population, or calls for violent or arbitrary measures against them or violates the human dignity of others by insulting, maliciously maligning or defaming one of the aforementioned groups, sections of the population or individuals on account of their belonging to one of the aforementioned groups or sections of the population.

Russia: Actions aimed at the incitement of hatred or enmity, as well as abasement of dignity of a person or a group of persons on the basis of sex, race, nationality, language, origin, attitude to religion, as well as affiliation to any social group, if these acts have been committed in public or with the use of mass media.

South Africa: No person may publish, propagate, advocate or communicate words based on one or more of the prohibited grounds, against any person, that could reasonably be construed to demonstrate a clear intention to be hurtful, be harmful or to incite harm, promote or propagate hatred.

Sweden: Anyone who, in a statement or in another message that is disseminated, threatens or expresses disrespect for a people group or another such group of persons with allusion to race, skin colour, national or ethnic origin, creed, sexual orientation or gender-transgender identity or expression

[1] https://www.ohchr.org/en/instruments-mechanisms/instruments/...

[2] https://laws-lois.justice.gc.ca/eng/acts/c-46/section-319.ht...

[3] https://www.gesetze-im-internet.de/englisch_stgb/englisch_st...

[4] https://www.imolin.org/doc/amlid/Russian_Federation_Criminal...

[5] http://www.justice.gov.za/legislation/acts/2000-004.pdf

[6] https://lagen.nu/1962:700#K16P8S1

> Any of these work for you? And because hate speech isn't a direct threat of violence.

The problem I see with all of them is that they either allow prosecution of hurt feelings[1], or cover acts that are already covered by existing criminal legislation.

[1] being slightly facetious here

Going through the first few:

>The UN: Any advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence shall be prohibited by law.

In typical UN fashion, all of their pronouncements are filled with vague platitudes that, depending on how you look at it, are either routinely ignored by the signatories, or leave so much room for interpretation that it's possible to drive a truck through such a loophole.

What counts as "hatred"/"hostility"? Is it as simple as "[insert ethnicity here] are bad"? Going back to your previous claim of "You can hold and express the most offensive vile opinions on any subject you can imagine without it being hate speech", can you provide an illustrative example of "most offensive vile opinions" that would be allowed under that definition, and what would make it not allowed?

>Canada: Every one who, by communicating statements in any public place, incites hatred against any identifiable group where such incitement is likely to lead to a breach of the peace.

What does "breach of the peace" mean? This could mean anywhere between "hurt feelings" and "imminent lawless action". I'm sure that canada already has legislation that prohibits the latter, hate speech or not. So what's the difference here? Is it merely an aggravating factor? Are there things you can say that only become illegal if it's against an "identifiable group"?

>Germany: Whoever, in a manner suited to causing a disturbance of the public peace incites hatred against a national, racial, religious group or a group defined by their ethnic origin, against sections of the population or individuals on account of their belonging to one of the aforementioned groups or sections of the population, or calls for violent or arbitrary measures against them or violates the human dignity of others by insulting, maliciously maligning or defaming one of the aforementioned groups, sections of the population or individuals on account of their belonging to one of the aforementioned groups or sections of the population.

Same as above

None of these allow prosecution of hurt feelings, how the target of the hate speech feels or reacts to it doesn't matter at all. In fact in all these cases there doesn't have to be a victim present. The word incitement in the Canadian definition is inciting the aggressors to violence, not the targets. It's not like how it's used in "fighting words" laws.

>In fact in all these cases there doesn't have to be a victim present. The word incitement in the Canadian definition is inciting the aggressors to violence, not the targets.

From this description, I'm struggling to see the difference between "hate speech" laws and laws against inciting crime (eg. imminent lawless action standard in US law). Is your claim that the standards for the two should be the same?

There is none. Price gouging accusations have always been for political purposes.

sir, I would like to sell you a website

Is he wrong? "Price gouging" doesn't appear out of nowhere. It's always in response to some sort of demand/supply shock. As microeconomic theory would predict, prices would go up even without the requisite increase in input costs. "Price gouging" laws and accusations of such are political attempts at stopping this behavior from happening.

When the price point is outside said supply demand curve. https://en.wikipedia.org/wiki/Price_gouging

That definition doesn't seem to be what your link says the term means, from my skimming.

If a hotel fills all their rooms for the night or a gas station runs out of fuel, we can be sure that wasn't the case, right?

Price gouging is often seen as immoral because it involves high prices without a justifiable reason. It is often considered in absence of welfare analysis, even if the middle class can afford the price increase, it can still be considered price gouging. In a competitive market, prices are based on what the market can bear, not on moral considerations. In such markets, prices must remain low to remain in business. However, high prices without justifiable reasons could be indication of monopolistic behavior from too much consolidation, and should be called out and investigated.

I'm a bit late to this thread but this is the difference: In price gouging you're influencing the elasticity of the product by telling your consumers (explicitly or implicitly) that they should be ready to pay more because input costs have increased. You're moving the equilibrium itself to a higher price by exploiting consumer misunderstanding.

I don't even think anyone can ELI50 on that one. Like the others said, it's always a political determination. So, I could ELIcynic and say that price gouging is high prices that affect politically connected groups.

Remember when the Fed had to breakout the emergency measures to save bankers from having to very periodically, very temporarily, pay .00273% interest instead of .00236% interest [1] on overnight loans? It's who you know.

But if I were to steelman, it would be something like, "taking advantage of a higher equilibrium price when it's known that there is no longer easy entry into the market", which would cover e.g. its usage in disaster scenarios.

[1] Total interest, not annualized rate. https://news.ycombinator.com/item?id=21000023

Easy or not, taking the terms of your italics arguendo as having no vagueness, all that "price gouging" changes is who receives the goods: the people able and willing to pay more vs. the people who got in line first, bringing market transparency to where before there was just the lucky few before the shortage, and everyone else after.

You're misquoting your own comment .00273% vs .0236% That extra zero makes a difference.

Not really. This is a case where both numbers are so small that even the 10x difference between them shouldn’t matter, considering the narrow, limited scope, which was the point of the original comment.

Sorry for the sloppiness though.

I'm sure there are lots of legal definitions, but generally price gouging is the practice of bumping up prices in an emergency situation or any other case where the consumer is desperate and helpless to do anything but to just pay you what you ask.

Price gouging is opportunistic, price hikes due to supply/demand CAN be organic, but supply/demand effects can also be opportunistic in nature (organically ((human nature))

Historically speaking similar supply disruptions have caused smaller price spikes, so this exceptional price spike must have exceptional causes.

>Historically speaking similar supply disruptions have caused smaller price spikes

Can I get a source for this? If we look at the charts for margins (as %)[1, we see that current levels correspond roughly with the levels seen during the 2015 avian flu.

[1] https://www.macrotrends.net/stocks/charts/CALM/cal-maine-foo...

Others in this thread claim 2015 had much higher losses on the supply side. Therefore one would expect higher prices in 2015 than the current event if supply and demand is the only driver.

The latter isn't real because most people don't interact with markets, the former is how prices actually rise.

There is none in the eyes of a socialist

When you think it's about a supply and demand curve, you give your lunch money to the bully and thank the bully for their service, when you think it's price gouging, the bully has to inform you that your lunch money is actually theirs.

Demonizing price gouging tells producers that there's no incentive to build up resiliency because at time when it's needed, they'll just get accused of price gouging.

This is a false dichotomy. You can be resilient and also not price gouge. You can also do things in spite of accusations. Also blaming critics for misbehavior is classic DARVO.

When we're talking about a bird flu, "resilient" can mean having better hygiene practices. A lot of hygiene practices include improved infrastructure, more materials (e.g., personal protective equipment (PPE) like plastic covers over boots and disinfecting pans which you step in so you're not spreading bird poo on your boots).

When bird flu comes around, I keep it out. Which means I have same volume of eggs, and selling them at market prices... increased profit.

Then the mob comes around complaining that I'm price gouging.

Producers already refuse to build new capacity for temporary demand because if that demand slows after the temporary problem goes away, they are stuck with newly purchased hardware that they can't use without flooding the market with more product than demanded. We saw this with face masks for quite some time. It has become very obvious that "let them price gouge so it incentivizes producers to increase capacity" doesn't work.

I struggle to identify any situation in which price gouging shouldn't be demonized.

I don't find it difficult. When supply is low? Why sell your last few items for less than you need to? Out of kindness and generosity to the commons?

Are you serious?

Demonizing price gouging has nothing to do with resiliency. Corporations run things as lean as possible at all times because it's not a good gamble to keep a lot of stock of perishable items for the once every couple of decades shortage in your specific item.

On the margin, of course it's the case that being able to charge high prices incentivizes wanting to sell product.

Home Depot would have a reason to stock a few more snow shovels every winter and Valero would have reason to pay a few more trucks overtime before a hurricane if they knew that they'd make their money back and then some in expected value. They might decide to or not, they might be right or wrong, but that's reality.

It might not make sense even without laws limiting what you can charge for your products to stock up for such situations -- there are other ways we might want to incent things if it's worth it.

Note: this is talking about price gouging situations. The egg thing is a different situation, where the accusation -- despite the headline -- is collusion, not price gouging.

Staple foods tend to rise in price by leaps rather than gradually. I think that stores accept a low profit margin on them at some times because of their disproportionate effect on the store's reputation for cheapness. We were probably about due for a leap in egg prices anyway, and the recent production difficulties provided an excuse. Now egg prices can come down slightly and be seen as a relief.

No, Americans are being ripped off. I can buy 15 large eggs for about 3€ in Finland. How come one of the highest taxed countries can have lower price per egg than the land of the free and brave? We haven't invented a special recipe for making eggs. It's probably exactly the same as in US, probably even more expensive since you do everything by massive scale.

To be fair, this variant of the avian flu is just spreading to Europe now.

https://www.reuters.com/world/bird-flu-spreads-new-countries...

avian flu

there seems to be a lot of comments here arguing that this is okay, as long as it's caused by natural market forces rather than illegal collusion. as if the current law is the unquestionable pinnacle of morality.

whether this is caused by market forces or not, it's bad for society, bad for americans, and bad for the overall economy to allow egg producers to collect money like this just because they decided they want to. whether or not it's legal is a question for a court. the question worthy of discussion is whether or not it's moral, or should it be legal?

Should it though? If it's natural market forces then we have one of two solutions:

* Raise prices to reduce demand until supply can meet demand

* Randomly decide who can buy eggs because any eggs in the store at the lower price point will always be out of stock.

The benefit of the first solution is that it encourages more suppliers to enter the market and correct the supply distortion... as long as it's actually market driven and not collusion driven.

A lot of people seem to prefer your second solution because they think it's immoral for people with more money to be able to buy more things than people with less money.

> collect money like this just because they decided they want to

No one is forced to buy eggs. They don't get to dictate prices, they can only get what people are willing to pay.

If you really don't like the price of eggs but really want them buy a couple of chickens and get them for cheap.

You sound like soviet-era politicians in my eastern European country, when they painted entrepreneurs (and private profit) as the root of all evil, and centrally planned everything. It didn't go well.

Don't get me wrong, I think regulating markets is a good idea and the US probably doesn't do enough of that. But I don't get how raising egg prices are bad for society - nobody has to buy them, and this are just regular laws of supply and demand at work. If that's just a regular market activity, it will sort itself out.

If the top egg suppliers are really colluding to charge a higher price, then maybe folks should buy from a cheaper supplier? This isn't a new idea.

Related: "I made a site that tracks the price of eggs at every US Walmart. The most expensive costs 3.4X more than the cheapest."

[0] https://www.reddit.com/r/InternetIsBeautiful/comments/118y19...

[1] https://eggspensive.net/

NOTE: Not me. I didn't make the site. Someone on Reddit did.

Currently being discussed on HN here: https://news.ycombinator.com/item?id=34897534

Happening in almost every industry.

They'll pay just a month's worth of profit as a fine when they are finally caught years later by the feds

So totally worth it.

This is a great example of how supply and demand, in the real world, works. Prices don't automatically rise during supply constraints, or demand increases. Prices rise when those selling decide to raise them.

Also, most people don't actually interact with markets day to day. They shop at distribution centers which have contracts with suppliers.

To put it differently, throw out your economics textbooks because prices are far more complex.

The reason inflation happens is producers decide to raise prices. It's a human decision made by a small group of people (management or owners of companies), not the mass of people spending.

So what are we to do about it? Shame them? Impose price controls that lock them in as incumbents with no willing competitors?

It would be nice if more people could realize that supply shocks can only be solved by supply increases.

Farmers have finally cracked the code on how to increase greed and profits...economists puzzled as to why now

Is there any indication chicken farmers are seeing a massive influx of money? Or is it just the companies that control the pricing to customers at grocery stores seeing the extra money, while farmers don’t make much more?

Farmers don't set prices.

It's a little weird how an egg producer's optimal response to an egg shortage in our economic system is to keep not producing eggs.

It's almost like after enough rounds of consolidation, there's no guarantee that market economics will produce optimal outcomes for consumers.

Related ongoing thread:

Eggspensive - https://news.ycombinator.com/item?id=34897534 - Feb 2023 (113 comments)

anecdotally, here in Oregon the price of pasture raised eggs from small local farmers has not increased (was already $4-5 a dozen, still roughly that; the farm we buy from recently raised prices from $4 to $4.50/dozen large eggs).

-- at the market next to my house - 36 eggs are 6,700 won - I think $5.50? --

It’s one banana Michael, what could it cost? $10?

There seems to be an unusual amount of downvoting going on in this thread. It doesn’t seem a very emotive, political or otherwise controversial topic to me, what am I missing?

It's a proxy for capitalism vs socialism.

Boycott eggs. I started early (25 years ago).

Any explanation here?

From what I can find, eggs are considered one of the super foods by most people.

I would assume veganism or just opposition to factory farming is the explanation.

Vegan diet. Eggs can be a good nutrient source, but are not necessary.

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