Fewer cheques and more oversight: the US Senate seeks to cut off or restrict the flow of avian influenza aid to the major egg producers.
Highly pathogenic avian influenza (HPAI) continues to strain egg supply in the US while retail prices rose 15% in January 2025 alone and 53% year-on-year. The Administration has responded on two fronts: a USDA $1 billion plan to strengthen biosecurity and, above all, a Senate bill aimed at filtering who receives public funding.
“The objective is to ensure that public funds are directed towards the recovery of EGG PRODUCTION and not towards benefiting shareholders.”
New regulations and investigations shake the US egg-laying sector
The US poultry sector faces a constantly changing landscape, shaped by recent legislative proposals and an ongoing investigation by the Department of Justice. These developments, centred on avian influenza aid and rising egg prices, could have a significant impact on the operations and profitability of poultry companies in the coming years.
Restrictions on federal avian influenza aid: greater scrutiny for large producers
A new Senate bill entitled the “Ending Taxpayer Support for Big Egg Producers Act” seeks to restrict the way in which large poultry companies may use financial compensation received for highly pathogenic avian influenza (HPAI) outbreaks. The measure aims to ensure that public funds are directed towards the recovery of commercial egg production and not towards benefiting shareholders.
The legislative proposal establishes that large companies will not be permitted to use indemnity payments for dividend distributions or share buybacks during the two years following receipt of the aid. Furthermore, companies must certify that they genuinely require the compensation due to economic uncertainty and that they have no access to alternative sources of financing without significant detriment to their business.
The tabled bill, Ending Taxpayer Support for Big Egg Producers Act, sets two thresholds to qualify as a “covered company”: annual turnover exceeding $100 million and more than 1,500 employees. If a company exceeds both thresholds, it may only receive USDA indemnity payments if it:
- certifies a lack of alternative liquidity;
- commits to paying no dividends or conducting share buybacks for two years;
- accepts severe penalties if the certification is false.
“Large companies will not be permitted to use indemnity payments for dividend distributions or share buybacks during the two years following receipt of the aid.”
Operations that would be excluded from government aid
The bill is very specific about which companies will be affected. Those excluded from using aid payments for dividends or share buybacks would be companies meeting two very specific criteria: having annual revenues exceeding $100 million and more than 1,500 employees. Companies not meeting these requirements would not be affected by this new regulation.
Under the above criteria, the so-called Big Five egg producers would be excluded, according to the January 2025 Watt Publishing ranking, which together control around 50% of the domestic market, along with other major egg producers exceeding $100M in revenue and 1,500 employees:
- Cal-Maine Foods
- Rose Acre Farms
- Hillandale Farms (acquired in May 2025 by Brazilian magnate Ricardo Faria)
- Versova Holdings
- Daybreak Foods
“Companies with annual revenues exceeding $100 million and more than 1,500 employees would be excluded.”
The Department of Justice investigates the rise in egg prices
In parallel, the Department of Justice has launched an investigation into egg producers amid suspicions that the US egg industry may be exploiting avian influenza outbreaks to fix prices and increase profit margins. The investigation focuses on determining whether there has been supply manipulation or a price-fixing agreement, and whether companies have shared sensitive information on supply and pricing.
Investigators and some consumer advocacy groups argue that consolidation in the poultry sector may have enabled large companies and supermarkets to exploit the situation by restricting supply and driving up prices and profits.
“The aim is for payments to more accurately reflect actual economic losses.”
The poultry sector’s defence
For their part, representatives of the poultry sector maintain that producers are “price takers, not price makers” and that the market is responding to the uncertainty and disruption caused by avian influenza. They argue that egg prices are subject to the laws of supply and demand, and that the supply shortage caused by disease outbreaks, combined with sustained high sales volumes, has created the “perfect storm” in egg markets.
“Egg producers defend themselves: ‘We are price takers, not price makers’.”
Other legislative initiatives
In addition to the bill restricting the use of aid, there is another legislative proposal, the “Healthy Poultry Assistance and Indemnification Act (HPAI ACT)“, which seeks to extend compensation to all poultry producers located within avian influenza control areas, not only those whose flocks have tested positive. This bill proposes that payments be calculated based on average revenues from the previous five flocks, so as to more accurately reflect actual economic losses.
For further reading:
-. S.1904 – Ending Taxpayer Support for Big Egg Producers Act (22 May 2025)
-. US poultry on NeXusAvicultura
-. US Poultry & Eggs Sector at a Glance (USDA, updated January 2025)