Demand inexpensive food, reap the consequences, warn California producers

Retailers who seek out the least expensive options when purchasing food products may play a role in the determination of how so many Salmonella-tainted shell eggs entered the food supply without prior detection, according to two California brothers who are a part of the industry.

Alan and Ryan Armstrong care for 450,000 hens on their farm in Valley Center. Because they operate their business in California, they are subject stricter guidelines that their regulators believe have nearly wiped out Salmonella on local farms, but only nine additional states — Iowa not among them — have enacted similar government efforts.

The brothers and other California egg producers told reporter P.J. Huffstutter of the Los Angeles Times that one of the reasons the stricter regulations weren’t adopted nationwide has to do with increased cost.

“We’ve lost contracts over pennies a dozen,” Ryan Armstrong said. “They want cheap eggs.”

As of July, the U.S. Food and Drug Administration enacted new rules that they have said will prevent future food-borne illnesses from the nation’s egg supply, but many, including the Armstrong brothers, remain skeptical. Many of the tests required for California producers, which cost pennies per bird, are not included or not included as often in the new national rules.

…In the late 1980s, about 2,500 commercial egg producers served the U.S. market. Today, fewer that 200 big operators dominate the trade, using economies of scale to drive down production costs.

Many of the cheapest eggs are produced in the Midwest, where energy, farmland and feed cost less and where regulations are less onerous.

As a result, Iowa egg operators can undercut the competition. Last month it cost Midwest farmers 53.5 cents to produce a dozen eggs, about 16% less than in California, according to Iowa State University’s Egg Industry Center.

Fullerton wholesaler Michael Sencer, whose company supplies food service firms and chains including Ralphs, Costco and Trader Joe’s, bought inventory from Wright County Egg. His customers, he said, liked the low prices and ready supply.

“It drives the demand for Iowa eggs here in California and everywhere,” said Sencer, executive vice president of Hidden Villa Ranch…

According to the Iowa Egg Council, the state had more than 80 egg producers as of April 2008 who care for 57 million laying hens that producer roughly 14.25 billion eggs per year. The hens not only add to Iowa’s economic base by being sold retail, but through the estimated 57 million bushels of corn and 28.5 million bushels of soybeans that they consume each year.

Iowa is the top egg-producing state in the nation, followed by Ohio, Indiana, Pennsylvania and California. It is estimated that roughly 50 percent of all laying hens in the nation reside in those five states alone.

Two Iowa producers  voluntarily recalled more than half a billion eggs that have been linked to more than 1,500 cases of salmonella poisoning across the nation. The owners of both Wright County Egg and Hillandale Farms have been called to testify before Congress, and state and national agencies continue to investigate if existing government regulations were followed.

And, ironically enough, Austin “Jack” DeCoster, the owner of Wright County Egg and a man once classified as an “habitual violator” of state environmental laws, donated to a California campaign that hoped to defeat additional livestock regulations in that state.