CHANGE. Uncertainty. These are words American business owners — no matter the industry — loathe to hear.
Within agriculture, farmers require certainty so they can successfully carry out even their most basic activities. Ordering the correct supply of feed, gasoline, staffing levels and other daily inputs are all required to ensure that enough fresh food is produced and transported every day for consumers across America and around the world.
Unfortunately, American egg farmers are now preparing to navigate through an unwieldy patchwork of regulations and other laws that will adversely affect their production planning process.
As I write this, numerous states have joined Missouri in suing the state of California over egg production standards that were adopted in 2010 and, as of Jan. 15, 2015, will also be applied to famers in states selling eggs into California.
It's legislative and regulatory battles like this that are reshaping the future environment for egg farmers across the U.S. This uncertain future should be of concern to all agricultural industries.
Historically, the United Egg Producers (UEP) has worked with its members and a range of partners to clear a path forward on food safety, animal welfare and sustainability issues in response to market and consumer pressures.
So, over the past few years, we have advocated on behalf of a national standard that, over the long term, would have provided egg farmers and their customers with business and economic certainty. However, despite the existing imperative need and the challenges facing the industry, these recent efforts were unsuccessful.
Where does this leave America's egg farmers and millions of consumers who purchase eggs and egg products?
State-by-state egg production laws are the worst-case scenario, especially given the fact that farmers produce nearly 80 billion eggs per year, and a significant proportion are transported across state lines.
A state-by-state, piecemeal solution presents tremendous challenges given the fact that nearly half of the 50 states do not even produce enough eggs to meet their own consumer demand, and those that do meet in-state consumer demand rely on these other markets as export options for their egg surpluses.
The issue is further complicated by the massive consolidation that has happened in the egg production industry over the past few decades.
In 1976, there were around 10,000 egg farmers in the U.S., but today, in response to market pressures, there are fewer than 200 commercial egg companies. Approximately 25% of these farmers represent 89% of total U.S. egg production.
Consolidation has left the U.S. market with fewer egg farmers, and therefore, changes that affect even just a handful of farms could have implications for America's overall supply.
With all of this uncertainty, one thing is clear: UEP cannot do this alone as the issues are complex, and solving them will require collaboration both across state lines and across industries. As this process unfolds within the egg production and further-processing industry, it is likely to continue to create challenges that will affect food production in this country for years to come.
It is our hope that we can work alongside other agricultural industries as we confront these challenges. The dialogue has started and is occurring at a furious pace, which gives us no choice but to engage. This is especially true given the significant amount of legislative and regulatory debate that has occurred to this point and will no doubt continue.
As the trade organization representing U.S. egg farmers, UEP's participation is vital towards ensuring that a workable option for our members is identified and implemented, and we plan to continue this work and ask others to join with us on this important journey.
*Chad Gregory is president and chief executive officer of the United Egg Producers.