In 2015, the American egg industry produced about 90 billion shell eggs. Just over half of shell eggs go directly to retail, and the rest are further processed for food service. Despite being one of the easier farm businesses to enter, due to low start-up costs, the egg industry also has become concentrated in recent years.  In 2014, the four largest egg producers—Cal-Maine Foods, Rose Acre Farms, Rembrandt Enterprises, and Daybreak Foods—controlled just over 30% of laying hens. Egg production is also concentrated regionally with some 44% of production located in just 5 states—Iowa, Ohio, Indiana, Pennsylvania, and Texas.


So few companies didn’t always control the egg industry. As recently as 1987, the business was divided among some 2,500 producers. Today, that number is 192 producers. Mississippi-based Cal-Maine alone accounted for about 23% of shell egg consumption in 2015, and sells more than 1 billion dozen eggs per year. Cal-Maine also controls the largest flock in the country, including nearly 34 million laying hens and over 8 million pullets and breeders.

The size of hen flocks has risen as consolidation has intensified. Cal-Maine alone has acquired 18 companies since 1989, and now describes itself as a “leader in industry consolidation.” The average size of an egg-laying operation has increased nearly 75% since 1997, from 399,000 to more than 695,000 in 2012. 63 companies, each with flocks over 1 million, manage roughly 86% of production. Almost all production (99%) is concentrated in companies with flocks over 75,000 birds.

Many egg companies market their products as members of cooperatives. For instance, Cal-Maine is a member of the Eggland’s Best cooperative, and sells its eggs under the Eggland’s Best and Land O’ Lakes brands. Southern California Egg Cooperative bought Moark LLC, once a top-five egg producer, from Land O’ Lakes in 2014. This cooperative model in the egg industry is made possible by the Capper-Volstead Act of 1922, which exempts agricultural cooperatives from the antitrust scrutiny applied to other types of businesses.

These large egg companies have—at least for periods of time in particular regions—leveraged their power to manipulate egg prices. In 2010, Land O’ Lakes settled a $25 million class action lawsuit that charged the company, alongside other large producers and trade groups, fixed prices in the egg industry in the early 2000s. By manipulating the egg supply, the lawsuit alleged, producers forced prices to record highs by 2007. The case marked the first price fixing suit ever brought in the agriculture sector.

Consolidation in the egg industry also has raised food safety concerns. In 2010, the CDC attributed nearly 2,000 cases of Salmonella poisoning to shell eggs and ordered a recall of nearly 500 million eggs. Yet even though the eggs had been sold under 24 different brands, they all traced back to a single Iowa-based company, DeCoster Egg Farms, owned by Austin “Jack” DeCoster. DeCoster had a decades-long list of wage, labor, animal, and environment abuses on his record before the outbreak. In 2015 DeCoster was sentenced to three months in jail and his company was dissolved.

Consolidation also was a factor in the outbreak of highly contagious avian flu in the egg industry in 2015. The flu spread to at least 21 states, and led to the death or slaughter of about 50 million birds. Very large egg-laying operations in Iowa were most affected by the outbreak, with that state losing about 30 million hens alone. Public health experts have said that housing large numbers of hens in each barn can facilitate the rapid spread of such disease.

The egg industry also produces environmental problems similar to other livestock industries that rely on containment of animals. The 7.7 million layer hens in Sioux City, Iowa, for instance, each year produce as much manure as all the sewage produced by all humans in Seattle. Much of this manure finds its way to our rivers, lakes, and bays. In 2009, the largest egg producer in Ohio pled guilty to releasing egg wash water, which contains manure, into a local stream. Studies have shown a high degree of manure pollution in the Chesapeake Bay due to agriculture in the area, including egg and chicken production.

There is growing interest among eaters in organic and cage-free eggs. Organic eggs come from chickens that are raised free-range (meaning the chicken has some access to the outdoors), fed certified organic feed, and don’t receive any hormones or antibiotics. Cage-free eggs come from chickens that live with hundreds or thousands of other chickens in barns; conventional farms, by contrast, confine laying hens in tiny battery cages that allow the chicken on average only 67 square inches of space.  

But the vast majority of eggs are still produced conventionally. In September 2015, organic eggs accounted for only 4.2% of production, and cage-free eggs accounted for 4.5% of production. These percentages are, however, expected to increase as farmers meet demand from a growing number of restaurants and retailers to source cage-free eggs.

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Photo by Wilson Ring/Associated Press.