Documents suggest plot to hike US egg prices

In a lawsuit alleging the US egg industry conspired to increase consumer prices, 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 from 2004 to 2008, industry officials who blamed rising feed costs were covering up an orchestrated killing of hens 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.

 

The plaintiffs' attorneys said the new documents, from Sparboe Farms of Minnesota, the nation's fifth-largest egg producer, support 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 supplies reduction an animal welfare effort to give caged chickens more room. The lawsuit maintains it was a ruse to reduce the number of egg-laying hens and increase prices.

 

Defendants include NuCal Foods Inc., an egg distribution cooperative based in Ripon. Other defendants are Cal-Maine Foods Inc., Land O'Lakes Inc., Moark LLC, Norco Ranch Inc., Michael Foods Inc. and Rose Acre Farms Inc.

 

The documents, and Hausfeld's amended complaint unsealed April 8, are part of a civil lawsuit filed in US District Court in Philadelphia in 2008 on 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's documents include one from the United Egg Producers' research economist that said 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 April 12 to US 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.