Lawsuit may bring lower egg prices


We've all noticed rising prices at the grocery store, and most of us can reconcile these prices with higher fuel costs. If it costs more for producers to get their goods to the store shelves, it's going to cost consumers more. It's nothing to be happy about, but at least we can point to the reason our grocery bills are so much higher.

But several lawsuits against the egg industry argue that it's not just expensive gas driving prices up. In 2006, the average retail price for a dozen eggs was $1.30. That price jumped all the way to $2.20 earlier this year, before receding slightly to $1.85. While this may add a few bucks to a shopper's grocery bill, the price jump is really squeezing restaurant owners, who buy eggs by the truckload. There are currently six major lawsuits against the egg industry, alleging schemes to drive up the price of eggs.

The egg producers argue that costs are higher for them, from feed to fuel, and that's the reason prices are higher. But the plaintiffs say producers are intentionally limiting egg supply, which is down to 7.5 billion dozen this year from 7.6 billion dozen in 2006, to drive up the price. They point to the Animal Care Certified Program, enacted in 2000 by the United Egg Producers cooperative, to which the defendants all belong. The UEP says the program was put in place at great expense to the farmers for the benefit of the hens -- requiring more space in their cages for the birds and regular inspections. The plaintiffs say that the UEP enacted this plan under the guise of hen welfare and better food safety, when really the only reason it exists is to limit hen numbers and thus limit egg production. According to a Humane Society spokesperson, if they really gave a cluck about the hens, they'd do a lot more than just give them bigger cages. Hens are still being raised in deplorable conditions at most of the big farms.

The success of the lawsuit hinges on whether or not the UEP is a cooperative or a trade organization. As a trade organization, the UEP would be subject to antitrust laws, which they seem to have already admitted violating. But the UEP and its lawyers say they are a cooperative and therefore are exempt from antitrust legislation. If the lawsuit is successful, we might just see a drop in egg prices -- but then again, if the producers are ordered to pay millions in damages, wouldn't that make them charge more for their eggs to protect the bottom line anyway? Here's hoping the law is clear that they can't do that...