WSJ What’s News - What the ‘Wall Street of Eggs’ Means for Your Grocery Bill

Episode Date: February 18, 2025

P.M. Edition for Feb. 18. The Egg Clearinghouse connects large-volume buyers with sellers. WSJ agriculture reporter Patrick Thomas explains why it has a crucial role at a time when avian flu is limiting supplies. Plus, Coke and Pepsi are getting into the growing market for prebiotic sodas. WSJ beverage reporter Laura Cooper joins to discuss the companies’ plans. And the U.S. and Russia begin a formal process of negotiating the end of the war in Ukraine. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The U.S. and Russia announced a formal process to try to stop the war in Ukraine. Plus, the White House will no longer take DEI efforts into account when considering companies to be federal contractors. And how the Wall Street of eggs affects your grocery bill. It's really the only exchange of its kind in the egg market where you can get a true supply and demand picture. It allows the market to see what the value of their eggs are and who is buying and what they will buy for.

It's Tuesday, February 18th. I'm Alex Osela for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Let's start with the latest on the talks about Ukraine. The US and Russia have agreed to appoint high-level teams who would work together to try to end the conflict in Ukraine. That's according to Trump administration officials. The two sides stopped short of announcing a summit meeting between President Trump and Russian President Vladimir Putin, which Trump had signaled he hoped to hold soon.

The initiatives that the U.S. announced raised fresh questions about the broader process for halting a war that has already led to more than a million casualties. In the Middle East, Hamas said today it would release six living hostages, three more than originally stipulated by the ceasefire deal, as Israel agreed to begin negotiations to permanently end the war in Gaza. Hamas is also handing over the bodies of dead hostages for the first time on Thursday. The Israeli Prime Minister's Office confirmed the exchange of living and dead hostages after negotiations in Cairo. Arab mediators said that in exchange for the four bodies,

Israel will release all Palestinian women and minors under the age of 19, who were detained in Gaza after October 8th, 2023, and who weren't involved in the fighting. In Washington, the Trump administration is directing federal agencies to no longer consider a company's diversity, equity, and inclusion practices when deciding whether to procure its goods or services.

That's according to an announcement from the General Services Administration. The new policy reverses a Biden administration initiative that asks the government to weigh a company's internal DEI practices as one of many factors when considering whether to purchase that company's products or services. A spokesman for the GSA said that companies won't be penalized for continuing internal DEI programs under the new policy, but those programs won't be considered as a factor in contract awards.

The moves are the first in what the GSA says will be an overhaul of federal procurement practices. Last week, work at the Consumer Financial Protection Bureau, a government agency that acts as a financial watchdog for consumers, ground to a halt. Its acting director shut its headquarters for the week. And what comes next is murky. Finance reporter Angel Ao Young told our Your Money Briefing podcast what that could mean for consumers. Even though the CFPB's future is uncertain, that doesn't necessarily mean that a lot of the rules that they have passed in its lifetime are all going to go away. But if the CFPB is downsized,

if it goes away, that is not going to be a great thing for consumers, to just put it bluntly. One less agency that will be looking out for consumers' interests, and it bluntly. One less agency that will be looking out for consumers' interests, and it's also been a great resource for consumers to send their complaints to the government. There are consumer watchdog groups, so basically non-government entities that consumers do report to.

Most of them are nonprofits, and so those will still be available to consumers. But when we're talking about a federal regulator that consumers can go to report on their negative experiences with banks and financial payment apps, there really isn't any other at the moment. Or there isn't any other that is as consumer-facing as the CFPB. So the options will be pretty limited for consumers if the CFPB is downsized or if it goes away. To hear more from Angel,

listen to tomorrow's Your Money Briefing podcast. Coming up, what the Wall Street of eggs can tell us about the pricey dozen in your cart? That's after the break. the pricey dozen in your cart. That's after the break. Here's something that caught my attention on my last visit to the grocery store. Eggs have gotten way more expensive. Maybe you've noticed it too. According to the Labor Department, we consumers are paying about $5 a dozen on average, a record high and double the price from roughly a year

ago. Where do these prices come from, you might wonder? The nation's biggest egg marketplace, the Egg Clearing House, or ECI, plays a crucial role in providing eggs for those in need or having trouble getting them and how they're priced. No wonder some call it the Wall Street of eggs. WSJ reporter Patrick Thomas, who covers agriculture, joins us. So Patrick, egg trading

is different from other agricultural products like corn or cattle, right? So what does the ECI do? Patrick Thomas, WSJ, ETC At a very high level, what the ECI does is if I am a farmer who doesn't have eggs, it helps me find a farmer with eggs to spare. facilities and has had to put down their flocks but I've got 10 people who also need eggs can anybody help me? supply and demand picture. It allows the market to see what the value of their eggs are and who is buying and what they will buy for, which doesn't exist anywhere else out there. So everybody in the industry, they look at ECI and it helps them come up with the wholesale

price of eggs. And that ends up where these things start coming from. So ECI is an important part of the market. You know, I mentioned how expensive eggs are right now. What is going on that's driving up the price of eggs? So over the last couple of years, we've had the largest outbreak of bird flu of all time. It has killed more than 100 million egg-laying hens, and it has just caused a shortage of eggs on the market. Now, key thing to remember here is that demand for eggs

is always pretty steady among consumers. We can all complain about the price of eggs, but by and large people still buy the same amount of eggs as they usually do. into baked goods or things you buy at the restaurants or hotel breakfast buffets. What that does is there's no substitute for it. So when you have any sort of shortage on the market, it runs the price up like crazy. So what can the ECI or what's going on there tell us about where things are headed potentially in egg business? The first thing it tells us is that there's a huge demand and there's a lot of supply

gaps right now out there. The second thing is it shows us that there's still people with a lot of orders that they need to fill out there. And that's part of the reason why you're getting this big run up in prices. There's nothing else really like this in another food commodity. Like most futures or other commodities, for example, are traded on the CME, the Chicago Mercantile Exchange. There's just not like a privately held industry exchange that just trades the commodities that has such a big factor in price. There's not a beef clearinghouse or a chicken clearinghouse for meat. Eggs is kind of unique in this way.

That was WSJ reporter Patrick Thomas. Thanks so much, Patrick. Thanks so much for having me. US stocks kicked off the week on a muted note. Stocks stand close to record highs after a strong start to the year and a robust corporate earnings season, though some investors are nervous about signs of exuberance in the market. Today, though, major U.S. indexes ended the day slightly higher. The Dow and the Nasdaq were both up less than a tenth of a percent, and the S&P ticked

up about a quarter of a percent. From the egg case to the beverage fridge, there's something new on the shelves next to your ginger ale and tonic water. It's prebiotic sodas, and they're bubbling right off the shelves. According to Nielsen IQ data compiled by Goldman Sachs, combined U.S. retail sales for the companies currently dominating this market, OliPop and Poppy, were roughly $817 million in the year that ended January 25th. And Coke says the market for these specialty sodas could exceed $2 billion by 2029.

Now the beverage behemoths want in. Coke said today it will launch a soda promoting digestive health this month while Pepsi is formulating a version it aims to sell in the spring. Laura Cooper, who covers beverage companies for the journal, is here to tell us more. Laura, what do big beverage companies like Coke and Pepsi see in this market? Coke and Pepsi see this market as an area of opportunity. Both companies have been diversifying over the years. They've entered areas with less sugary soda, the zero options. They've also entered into energy drinks, even milk, seltzer. This is just the latest example of

these massive companies seeing changing consumer habits and interest in prebiotic sodas like Alipop and Poppy Seeing their success and wanting to get in on the action. Soda sales are down 1% So I can't say like soda sales are just tanking. They're just not booming Soda companies understand that they have to diversify to continue to grow and this is another way to do that Coke CEO actually said on a recent earnings call that it gives more shelf space to the overall beverage industry and that encourages greater growth in the sector and it gives, honestly, consumers more options

to buy more of their products. It fits into the larger strategies of attracting more customers to the brands and by moving into the healthier for you movement. Most of the consumers I spoke to for this story decided to drink Oli popop or Poppy instead of traditional soda because there is less sugar in it and because of what they felt was a functional benefit

to their health. So consumers are into the idea of healthier beverage options. What is it about the prebiotic sodas that they like? Consumers I've spoken with are interested in the functional benefits they think that this soda has for them. So it leans into being healthy as opposed to maybe a Coke or a Pepsi that many see as

an occasional treat. The jury is still out on exactly what this means for your health. Prebiotic sodas are generally made with inulin fiber, which comes naturally from the chicory or agave roots. So this is fiber that feeds the bacteria living in our bodies already. This is in contrast to probiotics, which comes from something like kombucha,

which introduce more microbes into your system. Gastroenterologists and dieticians I spoke to said that drinking this is better than drinking a sugary drink, but they did caution for people with digestive issues. That was WSJ reporter Laura Cooper. Thank you, Laura. Thanks so much, Alex.

And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansi and Pierre Bienamé with supervising producer Michael Cosmitis. I'm Alex Osela for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.