[Egg Distribution Disorder] ④ Japan Faces "Egg Shock," U.S. Hit by Collusion Allegations… "Golden Egg" Crisis Goes Global

Distinct Egg Distribution and Pricing Systems Across Countries
Japan Relies on Major Agricultural Cooperatives, While Large Agribusinesses Lead in the U.S.

Editor's NoteWith an annual per capita consumption of about 300 eggs per person, eggs are a staple and relatively affordable source of protein for the average South Korean household. Despite living in an era where 'one egg a day' is common, the price for a tray of 30 eggs at major retail outlets such as large supermarkets and grocery stores now easily exceeds 10,000 won. The price surge has been attributed to the impact of infectious diseases such as Avian Influenza (AI), which swept through layer (egg-laying chicken) farms last winter, resulting in a shortage of hens to lay eggs. Nevertheless, the supply-demand instability continues, even though the government has imported eggs to supplement the shortage and pursued various discount policies. Observers point to the outdated distribution structure and regulations that do not reflect real market circumstances as the underlying problems. The lack of a systematic price determination mechanism, combined with desk-bound arguments regarding the need to improve rearing environments, has led to an ongoing shortage of supply. The Asia Business Daily examined the tangled structure of the egg distribution market and sought alternatives to resolve the 'golden egg era' through international case studies and expert opinions.

Even in major advanced economies such as the United States and Japan, the complicated egg distribution structure and constant price fluctuations are a source of continued controversy.Given the short shelf life, daily production, and difficulty quantifying quality, the entrenched distribution structures and price standards for eggs have become policy challenges for each country.

According to leading international media outlets such as the Nihon Keizai Shimbun and the Wall Street Journal (WSJ), as well as the Korea Rural Economic Institute, Japan—one of the countries with the highest per capita egg consumption—struggled with record-high egg prices earlier this year. Prices for eggs (Tokyo M-size, the market standard) consistently exceeded 300 yen (about 2,700 won) per kilogram, primarily because of a spike in Avian Influenza (AI) and rising feed costs triggered by unrest in the Middle East.

Japan, 'Model of Price Stability,' Struggles with Soaring Egg Prices...Largest Agricultural Cooperative Announces Official Rates

In Japan, eggs have long been considered a classic example of price stability among daily necessities, often hailed as "model price performers." Since the 1970s, egg prices hovered around the 200-yen mark for about 50 years. However, this began to unravel with an "egg shock" when prices surged at the end of 2022, reaching an all-time high in March 2023 when prices surpassed 350 yen.

Most eggs in Japan are distributed through JA Zen-Noh, the largest agricultural cooperative, and wholesalers, passing through so-called GP (Grading & Packing) centers. At these centers, eggs undergo shell washing, sterilization, drying, candling (inspection using light), and grading. Egg prices are set and announced by JA Zen-Noh every morning, based on prices in major metropolitan areas. The prices are determined using data on the previous day's transactions at the directly operated large-scale GP centers. Although only about 20% of the total shipments are traded through JA Zen-Noh, the Japanese government uses the published prices from JA Zen-Noh as the benchmark (applied in the 'Egg Price Gap Compensation Program' to stabilize producer prices). This has made JA Zen-Noh's published rates the de facto official indicator of egg prices recognized even by the government.

With eggs traded and settled daily at GP centers throughout the country and a pricing system centered around JA Zen-Noh, Japan's egg distribution is considered relatively transparent. However, because JA Zen-Noh has long maintained similar price levels, small- and medium-sized farms have struggled with rising production costs, resulting in a consolidation of production among large-scale farms. As a result, critics say the industry cannot respond flexibly to sudden shocks, such as outbreaks of AI.

The Nihon Keizai Shimbun also reported that, based on the experience during the 'egg shock' of 2023—when production was ramped up despite falling demand and supply-demand balance was disrupted—egg producers in Japan have recently become more cautious about expanding output.

US Egg Industry Driven by Major Corporate Farms...Private Benchmark Faces Collusion Allegations

The United States has also seen a sharp rise in egg prices in recent years. According to the Federal Reserve, the average retail price for a dozen Grade A large eggs exceeded $2 (about 3,000 won) in February 2022 and even surged past $6 in March of last year, before quickly dropping back to the $2 level as of June. During the last presidential election campaign, U.S. President Donald Trump cited high egg prices as an emblem of inflation under the Biden administration.

Unlike South Korea and Japan, the U.S. industry is dominated by large-scale egg producers who handle virtually all aspects—production, packaging, distribution, and processing—rather than GP centers. A small number of top corporations produce most eggs traded in the U.S.; they transact directly with retailers like Walmart rather than dealing through wholesale markets. While there are wholesale exchanges for physical eggs, they account for only about 10% of the market; for the vast majority, large producers supply directly to retailers, making for a relatively simple supply structure.

The price of eggs is primarily determined using a private index known as the Urner Barry Index. The Urner Barry Index is a privately managed benchmark based on the collection and analysis of prices from wholesalers, producers, and distributors across the United States. The origins of this practice go back to the 19th-century harbor agricultural price bulletins, which became tradition over time and continue to be used today. Although the US Department of Agriculture (USDA) also publishes egg market data, most transactions reference Urner Barry as the industry standard.

Recently, the reliability of this traditional pricing mechanism has come into question. The three largest producers—Cal-Maine Foods, Versova, and Hickman's Family Farms—are embroiled in government and legal disputes over allegations that they colluded to manipulate the Urner Barry Index, particularly in the period when egg prices soared between June 2022 and March of last year. Senior executives from these companies allegedly communicated with each other to submit false or excessive bids, directly affecting the Urner Barry index and maximizing their own profits. Although the impact of AI was not negligible, the government suspects that egg company management intervened to prop up prices precisely when market signals pointed toward a correction driven by ordinary supply and demand.

Matt Levine, a Bloomberg columnist, compared the case to the LIBOR (London Interbank Offered Rate) scandal, saying, "The 'Egg LIBOR' has been manipulated," emphasizing that if one can sway the Urner Barry index, they can influence all egg prices in the U.S. market.

Germany Relies on Government-Authorized Packing Centers...EU Publishes Weekly Country Reports

The European Union (EU) was an early adopter of environmentally friendly and welfare-focused egg policies. In Germany, the largest egg consumer in the EU, eggs are distributed nationwide through 'packing centers' (Packstelle), which serve the same functions as GP centers. Packing centers are categorized as: ▲ commercial/large-scale packing centers ▲ collector packing centers ▲ farm packing centers. All must be licensed by the government. These centers contract directly with large retailers and operate under a fully standardized system designed to promote eco-friendly and animal welfare-certified eggs.

Egg prices in Germany are primarily determined through negotiations between producers and buyers. However, the industry closely references data published regularly by MEG, a market research institute that compiles, analyzes, and publishes egg and poultry prices and supply-demand statistics weekly and monthly. MEG collaborates with the German Federal Office for Agriculture and Food (BLE), as well as academic research institutes, distinguishing it from the private pricing benchmarks used in other countries.

The EU also collects and publishes egg prices in its 27 member states on a weekly basis through the "EU Egg Market Report." According to the latest report, even in Europe, the average price fell below 200 euros per 100 kilograms (about 330,000 won) in August 2024 but climbed to nearly 300 euros in April, reflecting a clear upward trend. The main reason was the impact of AI, but with stricter standards for layer chicken stocking densities, especially in Eastern Europe, facilities have struggled to adapt, contributing to shortages and inevitable price increases.

This content was produced with the assistance of AI translation services.