new documents boost egg-price fixing lawsuit

jodiv

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Jul 2, 2009
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found this in the news and thought it was of interest......and yet another reason i am so thank full for my flock of layers.


By TRACIE CONE, Associated Press Writer Tracie Cone, Associated Press Writer – 31 mins ago
FRESNO, Calif. – A lawsuit alleging the U.S. egg industry conspired to increase consumer prices got a boost recently when a defendant turned over documents and internal memos that show an industry group called for egg producers to slow production.

The lawsuit alleges that as egg prices climbed between 2004 and 2008, industry officials who blamed rising feed costs were covering up an orchestrated hen kill-off to reduce supplies.

"If you can get an agreement to manipulate supply, you are changing the economics of the market. Consumers will pay more," said attorney Michael Hausfeld, the lead attorney in the civil antitrust case against at least 13 of the nation's largest producers and trade groups, including industry giant Eggland's Best Inc. of Jeffersonville, Pa.

The plaintiffs' attorneys say the new documents from Sparboe Farms of Minnesota, the nation's fifth-largest egg producer, bolster the price-fixing allegations uncovered during California's 2008 Proposition 2 referendum that bans caged chickens by 2015.

The United Egg Producers had called the stock reduction an animal welfare effort to give caged chickens more room. The suit maintains it was a ruse to reduce the number of egg-laying hens and increase prices.

An attorney representing the defendants did not return a phone message left with her assistant. Officials of the United Egg Producers referred calls to an attorney, who also did not immediately return telephone messages.

The documents, and Hausfeld's amended complaint unsealed Thursday, are part of a civil suit filed U.S. District Court in Philadelphia in 2008 on the behalf of restaurants and food processors nationwide.

Sparboe agreed to turn over documents and communications with the United Egg Producers in exchange for being dropped from the lawsuit. Sparboe owner Beth Schnell was traveling in Europe and could not immediately be reached for comment, but a letter the company wrote to the trade group in 2003 expressed concern that the order for stock reductions "strikes of price fixing to us."

Sparboe's documents include one from the United Egg Producers' research economist that says the egg industry could earn more money by reducing the supply of eggs.

As a result of the new documents, the Humane Society of the United States sent a letter Monday to U.S. Attorney General Eric Holder asking that the Justice Department initiate a criminal investigation.

"The industry insists they can't afford a penny per egg to (switch to cage-free systems) and yet that penny pales in comparison to the profits they've been reaping from this alleged scheme. It proves the egg industry doesn't care about consumers or animals," said Jennifer Fearing, chief economist for the animal welfare group.

Defendants in the civil case include several of the biggest producers in the egg industry: Cal-Maine Foods Inc., Land O'Lakes Inc., Moark LLC, Norco Ranch Inc., Michael Foods Inc., Rose Acre Farms Inc. and NuCal Foods Inc. The companies account for nearly 42 percent of domestic production.
 
Super market eggs are still one of the best food bargains available. A backyard flock can't begin to produce eggs as cheaply as they can be purchased in the super market.
If this lawsuit is successful it will only serve to raise the price of eggs further. Corporations don't pay fines or judgement costs, end users do. They are a cost of doing business & they are passed along to the consumes like all other costs.
 
NYREDS~ I agree that the end user is the one that will foot the bill, but I am happy that someone is at least willing to stand up for what it right. So often we "let it go" because it "won't do any good" or "it will cost us more in the end" or "one vote won't make a difference"

We should all do what it right because it is right, IMO.
 
As a result of the new documents, the Humane Society of the United States sent a letter Monday to U.S. Attorney General Eric Holder asking that the Justice Department initiate a criminal investigation.

"The industry insists they can't afford a penny per egg to (switch to cage-free systems) and yet that penny pales in comparison to the profits they've been reaping from this alleged scheme. It proves the egg industry doesn't care about consumers or animals," said Jennifer Fearing, chief economist for the animal welfare group.


Egg farming is already the most verticially integrated and low-profit margin agricultural operation that I know of. There are fewer egg producers with every passing year and they are owned by fewer companies. And in spite of that there's still little profit to be made. I regularly see Grade A large or extra large eggs on loss-leader sales for 99 cents a dozen. That's close to fifty cents a dozen less than what my feed costs to produce eggs. Never mind any other expenses.

I don't like factory eggs, don't buy them, and don't eat them. But for the folks who are having to literally count pennies to get by that 'penny an egg' the organization speaks of equates to a twelve cent a dozen increase in price. For a system that is not necessarily any better than the present battery system. "Cage free" does not equate to "pastured", or "grass raised." It's just many thousands of birds in an open barn with no access to the outdoors - not even by the bogus 'free range' definition the USDA allows. You're not getting anything better than battery eggs that way. You just get to pay more for them.

If they were truly conspiring to price fix then they should be punished. When I see the Humane Society of the United States is involved though it makes me suspect there are more motives at work than the obvious ones.

.....Alan.
 
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