Attorney General Ellison reaches price-gouging settlement on egg prices
Howard Lake company’s egg prices increased 150 percent during pandemic; company agrees to limit prices during emergency
April 28, 2020 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today announced that his office has settled an investigation into potential price-gouging conduct by Howard Lake-based egg producer Forsman Farms.
“It’s harder than ever for Minnesotans to afford their lives during this pandemic. That’s why I worked closely with Governor Walz on his executive order banning price-gouging on essential goods, including food, during the peacetime emergency. It’s why I used my office’s power to enforce the order to investigate reports of skyrocketing egg prices in Minnesota,” Attorney General Ellison said. “We found that some egg producer supply prices had nearly tripled because pre-existing contracts tied egg prices to a market index. But supply contracts are not exempt from the prohibitions in the price-gouging ban.”
“I was encouraged to see Forsman Farms cooperate fully with my office’s investigation. I’m pleased that this mutual resolution protects Minnesotans against excessive increases in egg prices during the emergency.”
Forsman Farms is an egg producer that supplies egg products to wholesalers and grocery stores for retail sale to Minnesota consumers throughout the state. For some wholesale buyers, Forsman Farms used market-price agreements that tied egg prices to a third-party market index. As the index prices rose rapidly during the COVID-19 pandemic, Forsman Farms increased its prices by more than 150 percent over the company’s pre-emergency egg pricing. This caused greatly increased retail prices for Minnesota consumers.
Under Executive Order 20-10, price gouging on essential items, like food, is illegal for the duration of the COVID-19 peacetime emergency. Attorney General Ellison’s office has the authority to enforce the ban on pandemic profiteering on these items.
Under the terms of an Assurance of Discontinuance filed with the Ramsey County District Court, Forsman Farms agrees to limit its prices to no more than 20 percent over pre-emergency prices, and to abide by existing contracts if they dictate a price lower than this ceiling. Forsman Farms will be subject to a $75,000 civil penalty if it is found to have violated the Assurance.
The Attorney General’s Office continues to investigate concerns about the pricing practices of other actors in the egg industry.
Minnesotans are encouraged to report price-gouging on essential goods either through a dedicated online complaint form on our website or by calling Attorney General Ellison’s office at (651) 296-3353 (Metro) or (800) 657-3787 (Greater Minnesota).