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Egg production prices to rise following new regulations

By Caroline Scott-Thomas , 09-Jul-2009
Last updated on 09-Jul-2009 at 18:20 GMT

Egg prices may rise as producers are hit by new costs as a result of food safety measures.

The FDA unveiled the new rules on Tuesday along with a number of other proposals based on recommendations from the Food Safety Working Group set up by President Obama in March.

The FDA estimates that the new egg regulations will cost producers $81m annually. At around one cent per dozen, this is equivalent to a more than two percent increase in production costs, considering that the average cost of producing a dozen eggs in the US stands at 44 cents a dozen, according to International Egg Commission figures.

Vice president of government relations for United Egg Producers/United Egg Association Howard Magwire told FoodNavigator-USA.com that about one third of US eggs produced in 2008 were subject to further processing into a liquid, powder or frozen form for manufacturing, foodservice, export and retail.

He said: We made numerous suggestions to improve FDA's original proposal, and it appears the agency has adopted some of our ideas, which we appreciate. Other suggestions, which we considered important, were not adopted. Nevertheless, we will carefully study the entire final rule and work with FDA to make sure it is implemented in a way that is fair to producers and advances food safety for consumers.”

Neither the FDA nor the Grocery Manufacturers Association responded to questions regarding whether the new costs would be likely to impact the food industry.

Saving on health costs

However, the FDA has said that the new rule will save an annual $1.4bn in public health care costs. The agency said that 79,000 American consumers contract salmonella as a result of contaminated eggs each year, and 30 die.

Announcing the rule on Tuesday, FDA Commissioner Dr Margaret Hamburg said: “Preventing harm to consumers is our first priority. Today's action will prevent thousands of serious illnesses from salmonella in eggs.”

The rule requires egg producers to refrigerate eggs during storage and transportation; implement pest control measures; buy chicks and young hens from suppliers that monitor for salmonella; test hens and eggs for the bacteria; and clean and disinfect poultry houses that have tested positive.

However, the added cost will not affect producers with fewer than 3,000 hens, or those that submit their eggs for further processing, such as pasteurization.

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