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Egg producers deny any wrongdoing, plan to explore options for appeal.
December 1, 2023
The nation’s largest shell egg producer Cal-Maine Foods, as well as Rose Acre Farms, United Egg Producers, and United States Egg Marketers, will pay Kraft, Kellogg, General Mills and Nestle $17.7 million in damages for their role in an allege egg price-fixing “conspiracy,” an Illinois federal jury has decided. The amount awarded is lower than the $25 million the companies had been seeking.
Kraft will receive approximately $12.8 million, Kellogg about $3.2 million, General Mills about $914,000 and Nestle about $809,000.
According to the lawsuit, the defendants conspired as early as 1998 to “control supply and artificially maintain and increase the price of eggs” through a series of collective actions, including short-term measures such as a 5% emergency flock reduction and early molt and hen disposal plans. The lawsuit further argued that the companies limited supply by participating in the United Egg Producers Certified guidelines, which required more cage space for birds but consequently reduced supply. Lastly, the plaintiffs argued that the companies coordinated large-scale exports “to control the supply of eggs.”
Both Cal-Maine and Rose Acre expressed disappointment in the jury’s decision and denied any wrongdoing.
Cal-Maine Foods explained that over the past 20 years, the egg industry has responded to growing demands from consumers and retailers to improve the overall treatment of egg laying hens. The programs, the company said, were in line with other prevailing animal welfare laws across the protein industry and “were not intended to restrict supply and affect prices.”
“While we are disappointed with the overall decision, we prevailed on a number of issues that we believe are important and should ultimately define this case,” the company stated.
During the trial, plaintiffs alleged a conspiracy running from 1998 to 2008, with damages extending through 2012, but the court and jury determined that any alleged damages would be limited to the 2004-2008 period. Further, the jury rejected other key portions of the plaintiffs’ case that Cal-Maine said would limit the plaintiffs’ damages request.
Cal-Maine said it will continue to assess the decision as well as options for appeal.
Rose Acre Farms said it “strongly disagrees” with the jury’s verdict and damages award, “which contradicts the jury decisions in the two previous trials (with other plaintiffs) on these same issues, which resulted in defense victories.”
Rose Acre said it has and continues to steadfastly deny being part of any “anticompetitive egg price-fixing conspiracy” and “will continue to explore and consider all legal options, including post-trial relief and appeal.”
“We remain committed, as we have over the past 70 years, to producing the highest-quality eggs and egg products for our valued customers. We pride ourselves on the small-town values of character, integrity and service,” the company said.
United Egg Producers declined to comment, and United States Egg Marketers had not provided a response by press time.
Krissa Welshans grew up on a crop farm and cow-calf operation in Marlette, Michigan. Welshans earned a bachelor’s degree in animal science from Michigan State University and master’s degree in public policy from New England College. She and her husband Brock run a show cattle operation in Henrietta, Texas, where they reside with their son, Wynn.
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