Lawsuit Alleges Egg Price-Fixing Scheme

by Kristen Ridley · 2010-05-02 09:20:00 UTC
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In response to a dramatic rise in egg prices from 2004 to 2008, a collection of restaurants and food companies filed a class-action lawsuit against the several nation's largest egg producers accusing them of a price-fixing scheme. The lawsuit alleges that a hen kill-off was orchestrated to reduce supply and raise profits. The United Egg Producers industry group maintains that the reduction is the result of an effort to improve animal welfare, giving hens more room.

Things are starting to look worse for the egg factory farmers. One of the targets of the lawsuit, Sparboe Farms of Minnesota, the fifth-largest egg producer in the US, was recently dropped from the suit in exchange for providing communication documents with the United Egg Producers, evidence that strongly bolsters the price-fixing allegations.

These developments highlight just how bad the problem of agricultural consolidation has gotten in this country, as well as the problems it breeds. To give a few examples, over 80 percent of the nation's beef is packed by just four conglomerates. The same staggering numbers are true for corn exports, soybean crushing, and meat chickens. And too often it is the same handful of companies, such as ConAgra, Cargill, and Tyson, controlling multiple agricultural sectors. Our nation's food is in by an ever-smaller number of ever-more-powerful hands.

This egg lawsuit covers 40 percent of the eggs produced in this country and includes Land O'Lakes Inc., Cal-Maine Foods Inc., Moark LLC, Norco Ranch Inc., Michael Foods Inc., Rose Acre Farms Inc., NuCal Foods Inc., and two suppliers for the egg giant Eggland's Best. In response to the new evidence provided by Sparboe Farms, the Humane Society of the United States has called for a criminal price-fixing investigation. Given the Department of Justice's recent tough talk on Big Ag monopolies, they might just listen.

Fortunately, it's easy for the average consumer to do something right now about this growing problem: know your farmer. It's harder to price-gouge your customers when you have to look them in the eye and answer their questions. And if you're at the farmer's market, anyway, you can always look for lower prices a few stalls down. By buying personally from local farmers you refuse to give these hulking companies more power and you directly help small farmers to fight back, and you protect your own pocketbook in the long run.

Photo credit: Solveig Osk via Flickr

Kristen Ridley is an artist, foodie, and aspiring grass farmer who earned her Bachelor's Degree at the University of Southern California.
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