New Egg Safety Rules
Fail to Go Over Easy

Lax regulations lead to cutting corners for some egg producers.

By Mattea Kramer

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Two-tenths of a penny per dozen. That’s what it costs Pennsylvania farmers to make eggs safer. By disinfecting henhouses, trapping rodents and regularly testing for harmful bacteria, the state’s egg farmers have cut the presence of salmonella by more than half.

But egg producers in much of the rest of the country haven’t followed suit. Last summer, two large Iowa producers recalled 500 million salmonella-tainted eggs – the largest egg recall in history – as more than 1,900 people nationwide got sick and scared many consumers away from eggs

Jim Bussey was one of them. He ate an egg-and-sausage taco served from a catering truck outside his office in Houston. That breakfast led to a four-day hospital stay, during which his kidneys nearly failed. A year later, diarrhea still plagues him and he needs surgery.

Millions of Americans suffer from foodborne illness each year. Michael Batz, head of food safety programs at the University of Florida’s Emerging Pathogens Institute, calculates the cost to all of those victims. He factors in missed work, medical bills, victims’ assessments of how their illness harmed them (called “quality-adjusted life”) and premature deaths.

Batz figures that the monetary loss from salmonella-contaminated eggs is $370 million annually. The non-monetary loss is also substantial. An estimated 115,000 people suffer this type of food poisoning each year, resulting in 42 fatalities, Batz estimates.

Costs and Benefits

Spending two-tenths of a penny per dozen eggs to protect consumers may not sound like much, but it adds up in an industry that produces 90 billion eggs each year. It’s an example of the cost-benefit calculations some companies make as they consider implementing new food safety measures.

Profits for egg farmers are small, and lax regulations have made it more attractive for some producers to cut corners rather than invest in sanitation. Consumers, meanwhile, have little information about who produces the eggs stacked in their grocery store coolers.

New federal rules, based on the Pennsylvania program, are the first safety measures required of egg producers. The rules, which went into effect in July 2010 for large producers (about 80 percent of the industry), followed a decades-long discussion that began after the Centers for Disease Control and Prevention first traced salmonella to eggs in 1986.

The new federal rules initially specified that the Food and Drug Administration would inspect egg farms annually, but that was later reduced to once every three years. When inspections began in September 2010, the FDA announced it would visit 600 facilities by January 2012. Only 35 farms were reviewed in the first four months because, the FDA said, the agency initially targeted only the highest-risk farms with histories of violations, requiring intensive, time-consuming inspections. At that rate, initial inspections won’t conclude until the end of 2014, nearly three years behind schedule. The FDA declined to say how many inspections have been completed since the first four months, but an FDA spokeswoman said the program was on pace to meet the deadline.

Now, some members of Congress want to cut FDA’s funding.

“The major reason food is safe in America isn’t because of government. It’s because the private sector does a huge job of self-policing,” said Rep. Jack Kingston, R-Ga., who chairs the House Appropriations subcommittee that oversees funding for the FDA.

Sarah Klein, staff attorney for the consumer-oriented Center for Science in the Public Interest, disagrees. “Forty-eight million Americans get food poisoning every year,” she said. “It’s disingenuous to say … policies that allow industry to police itself without oversight from the government are effective.”

Thin profit margins make investing in safety difficult, farmers say. The higher safety standards mean even thinner profits.

“When I worked for an egg company, we had to take things out to the fourth decimal place to see if we were making a profit or loss,” said Paul Hostetter, who now works for the nonprofit PennAg Industries Association and helps Pennsylvania egg producers comply with sanitation guidelines.

State Efforts

Pennsylvania’s safety efforts began in the early 1990s after eggs from that state were linked to widespread salmonella contamination in New York. Faced with the possibility of losing their largest market, Pennsylvania egg farmers began a quality assurance pilot program.

Iowa, the source of last year’s massive egg recall, is the largest egg-producing state by a wide margin, turning out 14 billion eggs annually. An egg quality assurance effort there had gone inactive in recent years.

The FDA estimates that the new federal rules, which are slightly more rigorous than the Pennsylvania standards, will cost large egg producers $100,000 each year. That means the 175 biggest companies, which constitute 95 percent of the industry, together will spend about $20 million annually to comply. That’s a fraction of the $370 million that Batz calculates as the annual cost of egg-related salmonellosis.

Even so, egg producers interested in keeping their costs down may not see the potential savings to consumers as an incentive to pay for better sanitation, despite the new FDA rules. At the grocery store, customers still won’t know if the eggs they are buying come from sanitary farms.

“Obviously [many in the industry] don’t want to unduly burden themselves with preventive measures that are costly,” said Klein. “Especially when they believe the chances of causing an outbreak – or having an outbreak traced to them – are small.”

In the event that an illness is traced to its source, the offending farmer does pay a considerable price. For example, Wright County Egg, the larger of the two major Iowa producers responsible for the 2010 recall, was shut down for four months last year. Both farms face numerous lawsuits over the contamination.

“There’s that risk assessment of the cost of complying versus the cost of getting caught,” said Daniel Otto, an economist at Iowa State University. “You have to have commensurate penalties and a high probability of detection and enforcement” for the new regulation to be effective.

Wright County Egg, one of several egg farms and related businesses owned and operated by Austin “Jack” DeCoster and his family, produces about 1.4 billion eggs each year, or more than one out of every 100 eggs in the country. In a 2003 article about DeCoster’s businesses, which have frequently been fined for health and safety violations, the Omaha World-Herald estimated his annual profits at $13.3 million.

When inspectors checked Wright County Egg’s barns after last year’s salmonella outbreak, they reported finding uncontained mountains of chicken manure; feces in the hens’ food supply; rodents; and maggots and flies “too numerous to count.”

In testimony before Congress in September 2010, DeCoster’s son Peter said the salmonella contamination had likely come from the chicken feed used on his family’s farms, not the conditions of the farms themselves. Peter DeCoster did not return several calls seeking comment for this story.

Jim Bussey has been sick for more than a year now. His job with a defense contractor makes it difficult for him to miss work, but he said he has no choice but to take time off. His doctor has told him he needs hemorrhoid surgery to repair the damage from his salmonella attack.

CORRECTION: An earlier version of this article said only 35 farms had been inspected in the first four months of a Food and Drug Administration program because of a shortage of inspectors. The FDA says the reason only 35 farms were inspected is that the agency initially targeted only the highest-risk farms with histories of violations, which required intensive, time-consuming inspections. The FDA declined to say how many inspections have been completed since then, but its spokeswoman said the program was on pace to meet its deadline. This version has been updated.

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