By JOSH FUNK, Associated Press Business Writer

OMAHA, Neb. (AP) — Egg producers blame the bird flu outbreak for driving prices to record highs, but critics believe giant companies are taking advantage of their market dominance to profit handsomely at the expense of budget-conscious egg buyers.

Advocacy groups, Democratic lawmakers and a Federal Trade Commission member are calling for a government investigation after egg prices spiked to a record average of $4.95 per dozen this month. The Trump administration did unveil a plan this week to combat bird flu, but how much that might ease egg prices — a key driver of inflation — remains to be seen.

“Donald Trump promised to lower food prices on ‘Day One’, but with egg prices skyrocketing out of control, he fired the workers charged with containing bird flu. Working families need relief now,” Sen. Elizabeth Warren said in a statement.

What’s behind the record egg prices?

The industry, and most experts, squarely blame bird flu. More than 166 million birds have been slaughtered to contain the virus. Some 30 million egg layers have been wiped out just since January, significantly disrupting egg supplies. The Department of Agriculture’s longstanding policy has been to kill entire flocks anytime the virus is found on a farm.

FILE – Eggs are for sale at a grocery store in Lyndhurst, New Jersey, on Tuesday, Feb. 4, 2025, as bird flu is forcing farmers to slaughter millions of chickens a month, pushing U.S. egg prices to more than double their cost in the summer of 2023. (AP Photo/Ted Shaffrey, File)

As a result, the number of egg layers has dropped nationwide by about 12% from before the outbreak to 292 million birds, according to a Feb. 1 USDA estimate, but another 11 million egg layers have been killed since then, so it’s likely worse. When prices spiked to $4.82 two years ago and prompted initial calls for price gouging probes, the flock was above 300 million.

“This has nothing to do with anything other than bird flu. And I think to suggest anything else is a misreading of the facts and the reality,” American Egg Board President Emily Metz said.

“Our farmers are in the fight of their lives, period, full stop. And they’re doing everything they can to keep these birds safe,” Metz said. “This is a supply challenge. Due to bird flu. Nothing else.”

Farm Action suspects monopolistic behavior. The group that lobbies on behalf of smaller farmers, consumers and rural communities notes that egg production is only down about 4% from last year and some 7.57 billion table eggs were produced last month, yet some consumers are still finding egg shelves empty at their local grocery stores.

“Dominant egg corporations are blaming avian flu for the price hikes that we’re seeing. But while the egg supply has fallen only slightly, these companies profits have soared,” said Angela Huffman, Farm Action’s president. The Justice Department acknowledged receiving the group’s letter calling for an investigation but declined to comment on it.

The fact that a jury ruled in 2023 that major egg producers used various means to limit the domestic supply of eggs to increase the price of products during the 2000s only adds to the doubts about their motives now.

What do the numbers show?

Retail egg prices had generally remained below $2 per dozen for years before this outbreak began. Prices have more than doubled since then, boosting profits for egg producers even as they deal with soaring costs.

FILE – The eggs price is displayed on the edge of a shelf at a grocery store in Glenview, Ill., Monday, Feb. 10, 2025. (AP Photo/Nam Y. Huh, File)

Most of the dominant producers are privately held companies and don’t release their results. But the biggest, Cal-Maine Foods, which supplies about 20% of the nation’s eggs, is public, and its profits increased dramatically. Cal-Maine reported a $219 million profit in the most recent quarter when its eggs sold for an average of $2.74 per dozen, up from just $1.2 million in the quarter just before this outbreak began in early 2022 when its eggs were selling for $1.37 per dozen.

Sherman Miller, Cal-Maine’s president and CEO, said in reporting the numbers that higher market prices “have continued to rise this fiscal year as supply levels of shell eggs have been restricted due to recent outbreaks of highly pathogenic avian influenza.”

But he said Cal-Maine also sold significantly more eggs — some 330 million dozens, up from 288 million the year before — in the quarter because demand is so strong and Cal-Maine has made a number of acquisitions. Cal-Maine also suffered few outbreaks on its farms, outside of a couple facilities in Kansas and Texas. The Mississippi-based company didn’t respond to calls from The Associated Press.

What about production costs?

Economists and analysts say the record egg prices aren’t a sure sign of something nefarious, and short-term profits might only last until farms get hit. Once a flock is slaughtered, it can take as long as a year to clean a farm and raise new birds to egg-laying age. The USDA pays farmers for every bird killed, but it doesn’t cover all the costs for farmers as they go without income.

“The consumer, I think, will probably feel like they’re getting the rough end of the stick. But I guarantee you, the farmers that are having to depopulate the barns, they’re having a rougher time,” CoBank analyst Brian Earnest said.

Inflation in the costs of feed and fuel and labor have contributed to rising egg prices, and farmers have been investing in biosecurity measures to help keep the virus away. So production costs also appear to be at an all-time high, according to the U.S. Bureau of Labor Statistics’ producer price index.

“This isn’t a case where they’re taking the price up to gouge the market. It is the price is going up through auction at wholesale. And they’re benefiting from higher prices because supplies are tight,” University of Arkansas agricultural economist Jada Thompson said.

By CHRISTOPHER RUGABER, Associated Press Economics Writer

WASHINGTON (AP) — U.S. consumers cut back drastically on spending last month, the most since February 2021, even as inflation declined, though stiff tariffs threatened by the White House could disrupt that progress.

Americans cut their spending by 0.2% in January from the previous month, the Commerce Department said Friday, possibly because of unseasonably cold weather. Yet the retreat may be hinting at more caution by Americans amid rising economic uncertainty.

Inflation declined to 2.5% in January compared with a year earlier, down from 2.6% in December, the government said. Excluding the volatile food and energy categories, core prices dropped to 2.6%, the lowest since June, from 2.8%.

Inflation spiked in 2022 to its highest level in four decades, propelling President Donald Trump to the White House and causing the Federal Reserve to rapidly raise interest rates to tame prices.

Last month’s decline could reassure Fed officials that inflation is still slowly cooling. The Fed prefers Friday’s measure to the more widely-known consumer price index, which rose for the fifth straight month in January to 3%. Friday’s gauge calculates inflation slightly differently: For example, it puts less weight on the costs of housing and used cars.

Even so, the key question preoccupying many American consumers, investors, and business executives is whether Trump’s extensive tariff proposals will push prices higher in the coming months. Trump said Thursday he will double his recently-announced tariffs on Chinese imports to 20%, and will impose 25% import taxes on Canada and Mexico next Tuesday. The three countries are the United States’ top trading partners.

Trump is also calling for widespread layoffs of federal workers, which could cause hundreds of thousands of job losses and potentially lift the unemployment rate.

“Increased uncertainty surrounding trade, fiscal and regulatory policy is casting a shadow over the outlook,” said Lydia Boussour, a senior economist at accounting and consulting firm EY.

On a monthly basis, prices rose 0.3% in January from the previous month, matching December’s 0.3% increase. Core prices rose 0.3%, up from 0.2% in December. If sustained, January’s increases would keep inflation running above the Fed’s target. The Fed pays more attention to core prices because they provide a better read of future inflation.

A big concern right now is whether tariffs will push up inflation, or slow the economy, or — in a particularly toxic combination — both.

A report from the Federal Reserve’s Boston branch this month concluded that 25% tariffs on Canada and Mexico, along with Trump’s initial 10% import taxes on China, could lift core inflation by as much as 0.8 percentage points.

By VLADIMIR ISACHENKOV, Associated Press

MOSCOW (AP) — Russia has offered the United States to restore direct air links between the two countries during the latest round of consultations with Washington, the Russian Foreign Ministry said Friday.

Russian and U.S. diplomats met in Istanbul on Thursday to discuss normalizing the operation of their respective embassies that has been crippled by multiple round of diplomats’ expulsions during previous years.

The Russian Foreign Ministry hailed the talks as “substantive and businesslike” and noted in a statement that “joint steps were agreed upon to ensure unimpeded financing of the activities of diplomatic missions of Russia and the United States on a reciprocal basis and to create appropriate conditions for diplomats to perform their official duties.”

The ministry said that it also offered the U.S. “to consider the possibility of restoring direct air traffic.” It didn’t add any details or possible time frame, and there was no immediate comment from Washington on the issue.

U.S. and other Western nations cut air links with Russia as part of a slew of sanctions imposed on Moscow after it sent troops into Ukraine on Feb. 24, 2022.

The U.S.-Russia talks in Istanbul followed an understanding reached during U.S. President Donald Trump’s call with Russian President Vladimir Putin, and negotiations between senior Russian and U.S. diplomats and other officials in Saudi Arabia earlier this month.

In Riyadh, Moscow and Washington agreed to start working toward ending the fighting in Ukraine and improving their diplomatic and economic ties. That includes restoring staffing at embassies, which in recent years were hit hard by mutual expulsions of large numbers of diplomats, closures of offices and other restrictions.

The U.S. State Department said that during Thursday’s talks in Istanbul, the U.S. delegation “raised concerns regarding access to banking and contracted services as well as the need to ensure stable and sustainable staffing levels at the U.S. Embassy in Moscow.”

“Through constructive discussions, both sides identified concrete initial steps to stabilize bilateral mission operations in these areas,” it said in a statement.

Sonata Coulter, U.S. deputy assistant secretary of state for Russia and Central Europe who led the U.S. delegation, and Alexander Darchiyev, the head of the North America department of the Russian Foreign Ministry who headed Moscow’s team of negotiators, “agreed to hold a follow-up meeting on these issues in the near term,” the U.S. State Department said.

Putin on Thursday hailed the Trump administration’s “pragmatism and realistic view” compared with what he described as the “stereotypes and messianic ideological cliches” of its predecessors.

“The first contacts with the new U.S. administration encourage certain hopes,” Putin said. “There is a mutual readiness to work to restore relations and gradually solve a colossal amount of systemic strategic problems in the global architecture.”

By FATIMA HUSSEIN, Associated Press

WASHINGTON (AP) — The Social Security Administration is preparing to lay off at least 7,000 people from its workforce of 60,000, according to a person familiar with the agency’s plans who is not authorized to speak publicly. The workforce reduction, according to a second person who also spoke on the condition of anonymity, could be as high as 50%.

It’s unclear how the layoffs will directly impact the benefits of the 72.5 million Social Security beneficiaries, which include retirees and children who receive retirement and disability benefits. However, advocates and Democratic lawmakers warn that layoffs will reduce the agency’s ability to serve recipients in a timely manner.

Some say cuts to the workforce are, in effect, a cut in benefits.

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Later Friday, the agency sent out a news release outlining plans for “significant workforce reductions,” employee reassignments from “non-mission critical positions to mission critical direct service positions,” and an offer of voluntary separation agreements. The agency said in its letter to workers that reassignments “may be involuntary and may require retraining for new workloads.”

The layoffs are part of the Trump administration’s intensified efforts to shrink the size of the federal workforce through the Department of Government Efficiency, run by President Donald Trump’s advisor Elon Musk.

A representative from the Social Security Administration did not respond to an Associated Press request for comment.

The people familiar with the agency’s plans say that SSA’s new acting commissioner Leland Dudek held a meeting this week with management and told them they had to produce a plan that eliminated half of the workforce at SSA headquarters in Washington and at least half of the workers in regional offices.

In addition, the termination of office leases for Social Security sites across the country are detailed on the DOGE website, which maintains a “Wall of Receipts,” which is a self-described “transparent account of DOGE’s findings and actions.” The site states that leases for dozens of Social Security sites across Arkansas, Texas, Louisiana, Florida, Kentucky, North Carolina, and other states have been or will be ended.

“The Social Security Administration is already chronically understaffed. Now, the Trump Administration wants to demolish it,” said Nancy Altman, president of Social Security Works, an advocacy group for the popular public benefit program.

Altman said the reductions in force “will deny many Americans access to their hard-earned Social Security benefits. Field offices around the country will close. Wait times for the 1-800 number will soar.”

Social Security is one of the nation’s largest and most popular social programs. A January poll from The Associated Press-NORC Center for Public Affairs Research found that two-thirds of U.S. adults think the country is spending too little on Social Security.

The program faces a looming bankruptcy date if it is not addressed by Congress. The May 2024 Social Security and Medicare trustees’ report states that Social Security’s trust funds — which cover old age and disability recipients — will be unable to pay full benefits beginning in 2035. Then, Social Security would only be able to pay 83% of benefits.

Like other agencies, DOGE has embedded into the Social Security Administration as part of Trump’s January executive order, which has drawn concerns from career officials.

This month, the Social Security Administration ’s former acting commissioner Michelle King stepped down from her role at the agency after DOGE requested access to Social Security recipient information, according to two people familiar with the official’s departure who were not authorized to discuss the matter publicly.

Sen. Ron Wyden (D-Ore.) said in a statement that “a plan like this will result in field office closures that will hit seniors in rural communities the hardest.”

Other news organizations, including The American Prospect and The Washington Post, have reported that half of the Social Security Administration’s workforce could be on the chopping block.