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S. HRG. 112–695 

S. 3239—EGG PRODUCTS INSPECTION ACT 

AMENDMENTS OF 2012: IMPACT ON EGG 

PRODUCERS 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JULY 26, 2012 

Printed for the use of the 

Committee on Agriculture, Nutrition and Forestry 

( 

Available via the World Wide Web: http://www.fdsys.gov/ 

AGRIC-48812 with DISTILLER

COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY 

DEBBIE STABENOW, Michigan, Chairwoman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

PAT ROBERTS, Kansas 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

SAXBY CHAMBLISS, Georgia 

MIKE JOHANNS, Nebraska 

JOHN BOOZMAN, Arkansas 

CHARLES E. GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

JOHN HOEVEN, North Dakota 

CHRISTOPHER J. ADAMO, Majority Staff Director 

JONATHAN W. COPPESS, Majority Chief Counsel 

JESSICA L. WILLIAMS, Chief Clerk 

MICHAEL J. SEYFERT, Minority Staff Director 

ANNE C. HAZLETT, Minority Chief Counsel 

(II) 

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C O N T E N T S 

Page 

HEARING(S): 

S. 3239—Egg Products Inspection Act Amendments of 2012: Impact on Egg 

Producers .............................................................................................................. 1 

Thursday, July 26, 2012 

STATEMENTS PRESENTED BY SENATORS 

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan, Chairwoman, Committee on Agriculture, Nutrition and Forestry ............................ 1 

Roberts, Hon. Pat, U.S. Senator from the State of Kansas .................................. 2 

Witnesses 

Feinstein, Hon. Dianne, U.S. Senator From The State of California .................. 4 

Lathem, David, Chairman, United Egg Producers, Lathem Farms, 

Pendergrass, Georgia ........................................................................................... 7 

Benson, Eric, President, J.S. West & Companies, Modesto, California .............. 9 

Herbruck, Greg, Executive Vice President, Herbruck’s Poultry Ranch, Saranac, Michigan ....................................................................................................... 11 

Baer, Amon, Owner, Mendelson Egg Company, Lake Park, Minnesota ............. 13 

APPENDIX 

PREPARED STATEMENTS: 

Grassley, Hon. Charles .................................................................................... 24 

Thune, Hon. John ............................................................................................. 25 

Feinstein, Hon. Dianne .................................................................................... 26 

Baer, Amon ....................................................................................................... 29 

Benson, Eric ...................................................................................................... 35 

Herbruck, Greg ................................................................................................. 38 

Lathem, David .................................................................................................. 40 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Roberts, Hon. Pat: 

American Farm Bureau Federation, prepared statement ............................. 44 

National Veterinary Organizations, Joint Letter Requesting Non-support 

for S. 3239 ..................................................................................................... 45 

Various Organizations, Joint Letter Requesting Non-support for S. 3239 .. 46 

Feinstein, Hon. Dianne: 

Egg Bill Master Endorsement list, the Egg Products Inspection Act 

Amendments of 2012 .................................................................................... 48 

Grassley, Hon. Charles: 

Southwest Iowa Egg Cooperative, prepared statement ................................. 61 

Humane Society of the United States, prepared statement ................................. 63 

United Egg Producers, prepared statement and attachments ............................. 68 

QUESTION AND ANSWER: 

Stabenow, Hon. Debbie: 

Written questions to David Lathem ................................................................ 95 

Written questions to Greg Herbruck .............................................................. 93 

Written questions to Eric Benson ................................................................... 90 

Written questions to Amon Baer ..................................................................... 88 

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IV 

Roberts, Hon. Pat: 

Written questions to David Lathem ................................................................ 96 

Thune, Hon. John: 

Written questions to Hon. Dianne Feinstein ................................................. 86 

Written questions to David Lathem ................................................................ 98 

Written questions to Eric Benson ................................................................... 91 

Written questions to Greg Herbruck .............................................................. 93 

Written questions to Amon Baer ..................................................................... 88 

Feinstein, Hon. Dianne: 

Written response to questions from Hon. John Thune .................................. 86 

Baer, Amon: 

Written response to questions from Hon. Debbie Stabenow ......................... 88 

Written response to questions from Hon. John Thune .................................. 88 

Benson, Eric: 

Written response to questions from Hon. Debbie Stabenow ......................... 90 

Written response to questions from Hon. John Thune .................................. 91 

Herbruck, Greg: 

Written response to questions from Hon. Debbie Stabenow ......................... 93 

Written response to questions from Hon. John Thune .................................. 93 

Lathem, David: 

Written response to questions from Hon. Debbie Stabenow ......................... 95 

Written response to questions from Hon. Pat Roberts .................................. 96 

Written response to questions from Hon. John Thune .................................. 98 

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S. 3239—EGG PRODUCTS INSPECTION ACT 

AMENDMENTS OF 2012: IMPACT ON EGG 

PRODUCERS 

Thursday, July 26, 2012 

UNITED STATES SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY, 

Washington, DC 

The Committee met, pursuant to notice, at 9:35 a.m., in room 

328A, Russell Senate Office Building, Hon. Debbie Stabenow, 

Chairwoman of the Committee, presiding. 

Present: Senators Stabenow, Klobuchar, Roberts, Boozman, 

Grassley, and Thune. 

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR 

FROM THE STATE OF MICHIGAN, CHAIRWOMAN, COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY 

Chairwoman STABENOW. Good morning. We will call the Committee to order, Conservation, Nutrition and Forestry—excuse 

me—Agriculture, Nutrition and Forestry Committee, and I know 

we do have other members that are planning to join us, but, Senator Feinstein, in the interest of time, and I know you have many 

commitments as well, we want to move ahead this morning. 

This is a very important hearing. We appreciate your being here. 

We appreciate everyone being here today. There is tremendous 

amount of interest, as we can see from an overflow crowd today. 

We are here to consider S.3239, Egg Products Inspection Act 

Amendments of 2012, which is a bipartisan bill that is led by Senator Dianne Feinstein. 

We all know that breakfast is the most important meal of the 

day, whether you are running a farm, taking your produce to market, leading a Committee hearing, eggs are as much a part of our 

mornings as juice or coffee or the bacon on our plates, or the milk 

or grains in our cereal. So when we talk about this important nutritious product, it is very much a part of America and our nutrition and food system. 

Eggs are an important staple of the American diet. The average 

person consumes 250 eggs per year. I think I am probably above 

that actually. They are also an important part of the agricultural 

economy. Every year, eggs generate nearly $15 billion for our economy. So it is incredibly important that our producers have certainty as they produce the eggs that we need for so many of our 

food products. 

This bill we have before us is driven by a coalition of industry 

producers who have come together to request these changes, and 

it is designed to give producers certainty from regulations. Senator 

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Feinstein, the bill’s author, is here to testify today, as I indicated, 

as well as egg producers from across the country. 

This bill represents a compromise for egg production standards. 

It was proposed by the industry and has the support of the Humane Society of the United States. We will hear today from those 

who are in favor of the bill and the agreement, and we will hear 

from those who have concerns. I look forward to the testimony from 

Senator Feinstein and from the producers who have taken the 

time. Thank you to each of you for taking the time to join us, to 

be able to be here for this very important discussion on a very important issue. 

I will now turn to my friend and Ranking Member, Senator Pat 

Roberts, for his opening remarks. 

STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE 

STATE OF KANSAS 

Senator ROBERTS. Madam Chairwoman, thank you for calling 

this hearing this morning, giving us an opportunity to hear directly 

from egg producers regarding a bill that would, for the first time 

ever, put the Federal Government in charge of the standards under 

which eggs are produced in this country. 

And I truly appreciate the chance to hear from my friend and colleague, Senator Feinstein. Senator Feinstein and I have put a lot 

of years in on the Intelligence Committee and I thank her for 

standing up in behalf of our country, our national security, and the 

long years of effort that you have put on the Intelligence Committee. We have no greater obligation than the national security of 

our country and I thank you for your service. 

Senator FEINSTEIN. Thank you, sir. 

Senator ROBERTS. First let me say that I firmly believe that 

farmers and ranchers are good stewards of the animals under their 

care. One of the fundamental principles of the animal husbandry 

profession is that your animals get fed, watered, and taken care of 

the night before you actually head for the house. 

There is absolutely no excuse for animal cruelty, in particular, 

given the multitude of training programs and educational efforts 

about animal care and handling for those who work with and 

around animals. Producers understand that the better they take 

care of their animals, the more productive those animals will be. 

Second, let me say that Senator Feinstein and the egg producers 

of California have a real challenge. There is no doubt that California’s Proposition 2 has created some uncertainty in the industry. 

That comes with leadership. 

I am not sure this agreement between the United Egg Producers 

marketing cooperative and the Humane Society of the United 

States, HSUS—I guess everything has to be an acronym, I apologize for that—is a solution that addresses the unintended consequences we as policy makers need to consider. 

When this Committee considers any change in policy that will 

impact animal agriculture, there are a wide range of factors that 

should be taken into account. Considerations like food safety, animal health and welfare, the economics of food production, environmental issues, our international trade obligations, and most importantly, science. What is the best possible science available to govAGRIC-48812 with DISTILLER

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ern the manner in which our food supply is produced in this country? Is this legislation based on that kind of science? 

Put simply, when we deviate from science-based decisions, we 

end up making the very problems we are trying to resolve worse. 

If the science eventually says that a smaller cage is better, will this 

alliance of producers and HSUS be back before this Committee in 

a year or two petitioning for a change in the law when the science 

changes? 

I also hope to learn why egg producers were solidly against any 

agreement with HSUS before they were for it. What changed in the 

issue to bring about such a reversal in their position? I understand 

there are also class action suits involving antitrust issues that are 

at the forefront of many challenges that egg producers are dealing 

with right now. Is this agreement somehow viewed as an escape 

hatch from those discussions? 

I wish, Madam Chairwoman, that we had the Department of Agriculture with us here this morning to explain how they would actually enforce this agreement were it ever to become law. In addition to questions regarding the implications of this agreement on 

interstate commerce and our international trade obligations, I am 

also concerned about how this agreement will affect the price that 

consumers will pay for eggs. 

European consumers are dealing with these challenges right 

now. European consumers saw their supply of eggs drop 10 to 15 

percent soon after the government implemented its version of this 

law, a decrease which led to a 55 percent increase in the price of 

eggs. 

At the Federal level, this Committee must examine what effects 

a dramatic price increase like this would cause to our programs 

like the WIC program and SNAP or food stamps. A 55 percent increase in egg prices would significantly reduce the purchasing 

power of the recipient of these programs. I do not think we want 

that. 

Madam Chairwoman, I have letters in opposition to this legislation from the American Farm Bureau Federation, a group of four 

national veterinary organizations, and a letter signed by 94 state 

and national organizations representing egg, milk, sheep, wool, turkey, pork, and beef producers that I would like to enter for the 

record. 

Madam Chairman, thank you and I look forward to this morning’s discussion. 

Chairwoman STABENOW. Thank you very much. We will enter 

those documents into the record without objection. 

[The information from Hon. Pat Roberts can be found on pages 

44, 45 and 46 in the appendix.] 

Chairwoman STABENOW. Again, welcome to our very distinguished colleague, as Senator Roberts mentioned, the Chair of the 

Intelligence Committee. We owe you all a debt of gratitude for the 

hours that you spend, literally, every day in efforts to protect our 

country and all of us as Americans. So thank you for that. We also 

thank you for being here as the lead author of S.3239, the Egg 

Products Inspection Act, and we would welcome your comments in 

relationship to the bill. 

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STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR FROM 

THE STATE OF CALIFORNIA 

Senator FEINSTEIN. Well, thank you very much, Madam Chairman and Ranking Member Roberts, and I want to thank you really 

for the time to discuss this amendment which would be to the Egg 

Products Inspection Act. 

I want to just begin by pointing out that this is a bipartisan bill. 

It is co-sponsored by yourself, Senators Leahy, Blumenthal, Scott 

Brown, Cantwell, Collins, Kerry, Lautenberg, Lieberman, Menendez, Merkley, Murray, Saunders, Schumer, Vitter, and Wyden. Unfortunately, Senator Leahy could not be here this morning. He has 

a mark-up, as does Senator Klobuchar and myself at ten o’clock. I 

am also delighted to see the Ranking Member of the Judiciary 

Committee, Senator Grassley, here this morning as well. 

The United Egg Producers represent approximately 90 percent of 

the eggs sold in the United States, and the Humane Society of the 

United States is the largest animal welfare organization in the 

country, I believe with 11 million members. These two groups came 

together to forge a compromise agreement that can ensure the future of the egg industry and result in a better product. 

You are right, Senator Roberts. In 2008, California passed Proposition 2, which among other things created a requirement that hens 

be able to stretch their wings and turn around. This initiative 

passed with an overwhelming majority. Similar measures were also 

put in place in Michigan, Arizona, Washington, Ohio, and Oregon. 

The result of these individual state-level initiatives is now a patchwork of standards that make it hard for egg producers to know the 

rules of the road and to conduct interstate commerce. 

Egg farmers nationwide are stymied as they attempt to upgrade 

their infrastructure and develop new enterprises. Why grow when 

the rules of the road might change and invalidate your investments? Why develop a new market if that market might not be 

open to you in a few short years? This legislation addresses these 

problems. The agreement establishes a single national standard for 

the treatment of egg-laying hens and the labeling of eggs. 

Now, you are going to hear a lot in detail about it from the next 

panel, but let me just quickly, briefly explain what the bill does. 

The size of hen cages is increased over the next 18 years and enrichments like perches and nests are added so that chickens can 

engage in natural behaviors. The practice of depriving hens of food 

and water to increase egg production is outlawed. 

Minimum air quality standards are put in place for henhouse 

protecting workers and birds. And clear requirements for egg labeling are created so consumers know whether the eggs they buy 

come from hens that are caged, cage-free, free range, or housed in 

enriched cages. 

Now, there are some who have concerns about the bill, and I just 

want to be clear on a few points. This legislation only applies to 

egg producers and is the result of careful negotiation between animal welfare groups and the only industry that is affected. No other 

is affected. 

Secondly, I have heard concerns that the bill would hurt small 

producers. That is simply incorrect. Farmers with 3,000 birds or 

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fewer are specifically exempted from the provisions of this legislation. 

Organic, cage-free, and free range egg producers will also be unaffected by the housing provisions, except that they may see increased sales as consumers are able to more clearly tell what is 

available on store shelves as a result of the labeling provisions. 

And for those who are affected by our bill, there is a long phasein period, up to 18 years. In this period of time, most producers, 

I am told, will replace their cages in any event. 

Next, the science behind the legislation. This legislation is endorsed by the leading scientists in the egg industry, the American 

Veterinary Medical Association, and the two leading avian veterinary groups. Studies show that these new cages can result in lower 

mortality and higher productivity for hens, making them more efficient for egg producers. 

Finally, I want to set the record straight with regard to the cost 

of the bill. The CBO scores the legislation as having no cost, and 

a study by Agrilytica, a consulting firm, found that this legislation 

would not have a substantial price effect on consumers. It is also 

important to note that this bill reflects what is already happening 

because of consumer demand. McDonald’s, Burger King, Costo, 

Safeway, and other companies are already phasing in new humane 

handling requirements for the production of the food they sell. 

Further, a study by an independent research company, the Bantam Group, indicates broad support from consumers. Specifically, 

they found consumers support the industry transitioning to larger 

cages with enrichments like perches, by a ratio of 12 to 1, and I 

would like to submit for the record 13 pages of endorsements from 

organizations in virtually most major states in the country, if I can. 

Chairwoman STABENOW. Without objection. 

Senator FEINSTEIN. Thank you. 

[The information from Hon. Dianne Feinstein can be found on 

page 48 in the appendix.] 

Senator FEINSTEIN. You can tell how important this bill is to the 

egg industry because farmers have come from all across the United 

States to attend this hearing and show their support. You will 

meet several on the next panel, including Eric Benson from my 

State of California whom I would like to welcome. Other farmers 

are here as well in the audience. Let me just mention a few. 

Jim Dean from Iowa. Since 30 percent of the eggs in California 

grocery stores come from Iowa, farmers in Iowa have a strong interest in seeing this bill pass so that rules of the road are clear and 

they can be productive and grow and access this huge consumer 

market. 

Dolph Baker from Mississippi. He is CEO of Cal-Maine Foods 

which operates egg farms in multiple states. Cal-Maine will find it 

more and more difficult to comply with conflicting state standards 

unless we can pass this bill. 

Arnie Riebli, also from California. Peter, David, and Gary 

Forsman from Minnesota. They are here representing smaller scale 

operations. Marcus Rust, Bob Krouse, Ron Truex, and Roger Seger 

from Indiana. They have enacted state level production standards. 

They are having to make decisions about what infrastructure to inAGRIC-48812 with DISTILLER

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vest in and wondering if they are going to be locked out of their 

neighboring markets. 

Molly Weaver from Ohio. She is trying to cope with new regulations imposed by her home state and figure out how she will compete with eggs produced more cheaply by her neighbors just across 

state lines. Now, there are many producers who could not even get 

into the room today and they are sitting in overflow rooms around 

the corner, but they have all come to Washington to be heard. 

I would also like to add that the most recent list of supporters— 

well, I said that—is 13 pages long. It includes 14 agriculture and 

egg-producing groups, the four major veterinary groups who look at 

eggs and egg-laying hens, five consumer groups, and many more. 

Now, this compromise represents something very unique in animal agriculture. This is an animal welfare group and a major industry working together to forge an agreement that is practical and 

contains reasonable time frames for producers to implement new 

cage sizes, 18 years; new protections for the animals and workers; 

and clearer labeling. 

This is a practical, fair-minded resolution that I think solves a 

real problem for the egg industry. I encourage the Committee to 

support this bill. I thank you very much for this opportunity. 

[The prepared statement of Hon. Dianne Feinstein can be found 

on page 26 in the appendix.] 

Chairwoman STABENOW. Thank you very much for your comprehensive testimony. We look forward to working with you, and 

as we move forward in discussing this issue, I believe at this point 

we will, unless someone has a question for Senator Feinstein, that 

we will move forward to our other panel. But, Senator Grassley, 

you look like you might have a question. 

Senator GRASSLEY. I wonder, because we have all got to go to Judiciary, I would like to put a statement in the record, some questions to submit, and I would also like to submit a letter in opposition from the Southwest Iowa Egg Cooperative on the legislation. 

Chairwoman STABENOW. Without objection. 

[The information from Hon. Charles Grassley can be found on 

page 61 in the appendix.] 

Chairwoman STABENOW. Thank you again. We look forward to 

working with you—— 

Senator FEINSTEIN. Appreciate it. 

Chairwoman STABENOW. —and appreciate your comprehensive 

remarks. 

Senator FEINSTEIN. Thank you. 

Chairwoman STABENOW. We will ask our second panel to come 

forward at this point. 

Well, good morning. We appreciate so much all of you taking the 

time to join us today. Let me introduce each of our witnesses and 

then we will ask each of you for five minutes of verbal testimony. 

We certainly welcome any other written testimony you would like 

to leave with the Committee as well. And then we will do a round 

of questions. 

First let me introduce our first panelist. David Lathem is the 

Chairman of United Egg Producers and is an egg farmer from 

Pendergrass, Georgia. We are very pleased to have you with us 

today. 

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Our second panelist is Eric Benson from Modesto, California. Mr. 

Benson is President of J.W. West, a diversified agricultural company started by his family in 1909. So that is terrific. Welcome. 

I am particularly pleased to have the next witness from Michigan, Greg Herbruck, who manages Herbruck Poultry Ranch along 

with his son and two brothers. They are the third and fourth generation involved in this family farm, very well-respected leaders in 

agriculture in Michigan, and it is great to have you here. 

And then finally I am going to turn to Senator Roberts to welcome our final witness. 

Senator ROBERTS. Thank you, Madam Chair. I would like to introduce Amon Baer, second generation ag farmer from Lake Park, 

Minnesota. In this Committee, the term family farmer is volleyed 

back and forth with some poetic license, but when you look at the 

number of Baer family members that are actually in the business 

of farming, you quickly appreciate that Amon may have farmed out 

of necessity so that he had enough food for his family and all the 

mouths congregating around the dinner table. 

Amon Baer and his wife of 38 years, Camille, are owners and 

family farm operators. They have nine children, all of whom are involved in the farming operation. Together with two of their five 

sons, they own 300,000 laying hens and they grade, carton, and 

market 6 million dozen eggs per year. And believe it or not, Madam 

Chairman, this is not a big operation. 

Additionally, the Baers raise hogs and grow corn, soybeans, and 

wheat in Minnesota as well as Laramore and Dakota, North Dakota. To the south, Amon and one of his sons are partners in a 

farm near New Effington and Rosholt, South Dakota. And not to 

be outdone, one of his 14 siblings, three of Amon’s brothers, Amos, 

Joel, and Jonah, are also farming in the Red River Valley region. 

You cannot get any more farm family than Amon. Mr. Baer, if 

there was any more family in your farming operations, we may 

have trouble fitting them all into this room. Welcome. We appreciate your coming here today to share your thoughts on this legislation. 

Chairwoman STABENOW. Thank you. And welcome to each of you. 

We will start with Mr. Lathem. Good morning. 

STATEMENT OF DAVID LATHEM, CHAIRMAN, UNITED EGG 

PRODUCERS, LATHEM FARMS, PENDERGRASS, GEORGIA 

Mr. LATHEM. Good morning. My name is David Lathem. I am an 

egg farmer from Pendergrass, Georgia, and I am Chairman of the 

United Egg Producers. UEP represents farmers who market approximately 90 percent—— 

Chairwoman STABENOW. Excuse me, Mr. Lathem. We are going 

to ask you just to move. Either the mic is not on or just move it 

a little bit more towards your mouth. We want to make sure that 

everybody has a chance to hear you. 

Mr. LATHEM. Is that better? 

Chairwoman STABENOW. That is better. Thank you. 

Mr. LATHEM. Okay. UEP represents farmers who market approximately 90 percent of all eggs sold in the United States. I am 

pleased that in the hearing room and overflow room, we have egg 

producers who have come to Washington for this hearing and manAGRIC-48812 with DISTILLER

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age almost half of the nation’s laying hens. UEP strongly supports 

S.3239 and we appreciate the Committee having this hearing. 

Speaking personally, I believe that long-term viability of my family farm is in jeopardy without S.3239. Our farm is not among the 

very largest. We cannot set up different production systems to meet 

conflicting and inconsistent standards of every state. We need a 

production standard that is for everyone and is fair for everyone. 

S.3239 allows us to plan for our future. It lets us, as producers, 

take charge of our own destiny. This bill has the overwhelming 

support of our industry. Not unanimous, because nothing important is ever unanimous, but overwhelming. 

We as producers realize that we are living in the 21st century 

when the American public is interested as never before in where 

its food comes from and how it is produced. We should see this as 

an opportunity rather than a threat. UEP believes that S.3239 represents the sustainable future for all of us, but we are not the only 

ones. 

This bill has scientific support from the American Veterinary 

Medical Association and other professional societies. It has the support of Consumer Federation of America and the National Consumer’s League. Egg producer groups at the state level have come 

out in support from the Rocky Mountain Farmer’s Union to United 

Farm Workers. This bill has wide support. 

However, some do oppose it. I would like to engage in argument 

seriously and explain why we disagree. Some simply attack the Humane Society of the United States. They say, You cannot trust 

HSUS. It is no secret that our organization and HSUS have been 

adversaries. We have disagreed and fought on animal welfare use 

for years. 

But once we started to explore whether there might be common 

ground, they realized that we did care about the welfare of our 

hens and we realized that they did care about the survival of our 

farms. And so we began to do work, what everyone says you should 

do, look for common ground, seek compromise, try to find solutions. 

So the main complaints some people have against us in the egg 

industry, look for common ground, we plead guilty to that charge. 

Opponents of S.3239 also assert that this bill represents a slippery 

slope, a precedent that will inevitably force other animal industries 

into similar settlements. This is not true. There are two basic reasons why. 

First, we are all here because we as producers want this agreement. With all due respect to HSUS, if they were for the agreement 

and we were against it, I do not think we would be having this 

hearing today. If other livestock sectors did not want a legislative 

settlement with HSUS, it is not going to happen. 

The slippery slope argument says that if you approve this bill for 

eggs, you will inevitably follow up with similar laws for pork or 

beef. This assumes you as legislators are incapable of making distinctions between commodities. The problem with this argument is 

that it is completely at odds with what Congress has actually done 

over the years. 

You have, in fact, always looked at each commodity separately. 

You do not, for example, legislate the same program for cotton as 

you do for peanuts. Dairy is an animal product that has price supAGRIC-48812 with DISTILLER

9 

ports, but you have never seriously considered price supports for 

beef, pork, or eggs. Eggs have always been regulated differently 

from other animal products. 

The Food and Drug Administration has on-farm safety authority 

for our farms, but not for beef, pork, or turkey operations. USDA 

has civil penalty authority for eggs, but not for other livestock species. By contrast, USDA Packers and Stockyards Act applies to 

beef, pork, and broilers, but not to eggs. 

The slippery slope argument ignores this clear history and replaces it with hypothetical fears. The reality is that Congress and 

Federal agencies have always made distinctions among commodities. I hopefully you will forcefully reject this argument. 

Madam Chairwoman, I genuinely believe that the survival of my 

farm and other farms are hanging in the balance. We need Senate 

Bill 3239 in order to provide a fair operating environment for all 

American farms. I strongly urge this Committee to advance the legislation and I thank you for letting me speak today. 

[The prepared statement of Mr. Lathem can be found on page 40 

in the appendix.] 

Chairwoman STABENOW. Thank you very much. Mr. Benson, welcome. 

STATEMENT OF ERIC BENSON, PRESIDENT, J.S. WEST & 

COMPANIES, MODESTO, CALIFORNIA 

Mr. BENSON. Good morning and thank you for having us here, 

Senator Stabenow, and other Senators. We appreciate your attending. 

I am here today representing J.S. West here in Modesto, California. Our business was founded in 1909. We are family owned 

and operated, third and fourth generations of the West and Benson 

families now providing management for the company. We believe 

in providing the highest quality products to our customer and contributing to the communities in which we live and operate, for example, by offering high quality and retirement benefits to all 300 

of our employees. 

You have heard about the problems in the egg industry, the 

growing patchwork of inconsistent animal welfare statutes that 

began with Prop. 2 in California. Our family was deeply engaged 

in the debate on this. I have always believed that the marketplace 

should make most economic decisions through consumer demand 

and preferences. That is balanced by a belief in the political process 

to help set standards that our society believes in. 

The dilemma we face today is that today’s consumers will vote 

with their hearts and buy food with their pocketbooks. We as a society need to decide how we are to treat our food before it is food. 

I think Government’s role is to set a standard. We are willing and 

able to produce competitively under most all conditions as long as 

the playing field is fair and the rules are clear. 

I am here to tell you the best solution to our industry’s problems 

in this area is S.3239, the bill that our Senator, Dianne Feinstein, 

has sponsored along with 15 of her colleagues. We are very proud 

of the leadership our Senator has shown in standing tall as a 

champion for our industry and for improved animal welfare as well. 

The two are not incompatible. 

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10 

I would like to spend my brief time talking a bit about the system which would become a national standard if the bill passes. 

Under S.3239, producers would make a multi-year transition to enriched colony systems. At J.S. West, we have installed two production houses with this system and have taken a flock through the 

complete laying cycle with two more flocks currently in production. 

So if you want to know what the egg industry will look like if 

S.3239 passes, you can watch our web cam at jswest.com. It lets 

anybody with access to the Internet look at our hens live and in 

real time. The enriched colony system is not an experiment. These 

enclosures are the standard for caged egg production in the European Union. 

However, not many of these systems are in place in the United 

States yet, so you might be interested in some of our results. First, 

what exactly is it? It is larger than the conventional enclosure. In 

our case, each colony contains about 60 hens, measures 5 feet by 

12 feet. Each colony is furnished with a nest box, perches, scratch 

areas. 

Hens can express more of their natural behaviors and, of course, 

there is substantially more space per animal than in conventional 

enclosures, and you can see an example of these hens enjoying 

themselves with their perches and everything else right over here 

with our photograph that was taken out of our hens in the new system. 

Our results in this system have been very encouraging. Hen mortality is lower, meaning that the small portion of hens that die during the production cycle is lower than other systems. Our egg production is somewhat better than in conventional systems. Hen feed 

consumption is a little bit greater, but we think that is because of 

the higher activity levels and the use of feed in the scratch areas. 

And the birds definitely use the enrichments. 

S.3239 wisely provides for a multi-year phase-in of enriched systems. There are undoubtedly incremental capital costs associated 

with moving to the new system. However, that being said, manufacturers have told us that more than 80 percent of new equipment 

today is capable of conversion to these enriched colony systems. 

That means that S.3239 will not necessarily require most producers to make capital investments they were not already planning 

to make, albeit somewhat at a higher level than before. When you 

consider the cost of any investment, you always consider what the 

returns will be and what the alternatives are. 

If you really believe that you can maintain current conventional 

cage systems forever, there is a cost to enriched cages. In California, we are pretty sure that is not the case. If we cannot gain 

a consensus in favor of this enriched colony system at densities 

that society agrees is acceptable, the future will lie with those egg 

producers with the highest density of hens per square foot and the 

cheapest possible approach to food safety in a state where no rules 

exist and little concern is given to society’s standards on hen welfare. 

I am not here to criticize any particular production system or 

density level, but I am convinced that this colony system and the 

standards that support it are the best compromise for the future 

of our industry. This system has higher production efficiency and 

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better animal welfare than cage-free, free range, or conventional 

systems, and reflects the best welfare standard for egg production 

moving forward. 

I salute HSUS for their willingness to be open on compromise in 

this issue in supporting this legislation. The Humane Society of the 

United States, as Senator Roberts so succinctly put, without using 

the acronyms, they recognize that you can improve animal welfare 

within the context of an economically sustainable cage production 

system if it is designed right. 

What does make sense is a national production standard that is 

fair to everybody, that treats everybody the same, and that reflects 

our country’s ideas of fairness and humanity. That is what is required here and that is what S.3239 provides, and we strongly urge 

you to support it. Thank you very much, Senator. 

[The prepared statement of Mr. Benson can be found on page 35 

in the appendix.] 

Chairwoman STABENOW. Thank you very much. Mr. Herbruck, 

welcome. It is good to see you. 

STATEMENT OF GREG HERBRUCK, EXECUTIVE VICE PRESIDENT, HERBRUCK’S POULTRY RANCH, SARANAC, MICHIGAN 

Mr. HERBRUCK. Good morning and thank you for the chance to 

testify today. My name is Greg Herbruck and my brothers and I 

own and manage our egg farm in Michigan. Four generations of 

our family have been in the egg business and we struggle with the 

same challenges as other egg farmers and livestock producers. 

For example, more than half the cost of producing eggs is feed. 

In the current drought, we have seen costs go through the roof. As 

projected yields have fallen over much of the nation, grain prices 

have soared, and the vast majority of our feed cost is the corn and 

soybean meal. And yet, in some ways, the situation I will describe 

to you today is even more serious for us than the drought. 

Over the years, we have always tried to meet the needs of our 

customers. For example, we have been part of the growing organic 

egg industry and we partner with 28 other farms, many of them 

very small scale, to supply a wide range of eggs through different 

production systems. 

We also produce conventional eggs where the hens are kept in 

cages. There were good reasons our industry moved to this production system many decades ago: Animal health, protection from 

predators, and economic efficiencies. But we have to acknowledge 

that in the last few years, keeping hens in cages has become extremely controversial. 

As producers, we believed we had science on our side, having implemented the welfare recommendations of an independent scientific advisory committee. However, we have learned that consumers and voters do not make the decisions based simply on 

science. 

Most are several generations removed from the farm, and whether you call it values or emotion, the way they form their views of 

animal welfare issues is not the same as ours. They are our customers and in any business, if you do not listen to your customers, 

you are headed for trouble. 

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Egg farmers got a dramatic wake-up call when California voters 

passed Proposition 2 by a two to one margin in 2008. This ballot 

initiative made the conventional cage system illegal. Under the 

threat of similar ballot measures, other states moved to establish 

their own standards for egg production. Madam Chairwoman, you 

are aware that our State of Michigan was one of those. 

In just a few years, egg farms in Michigan will be required to 

provide more than twice as much space for each bird as the current 

industry standard. The future of our industry on the current path 

is a patchwork of state animal welfare laws that are inconsistent, 

contradictory, and ultimately unworkable. 

In many, if not most, cases, these laws will not just affect the 

producers in a particular state. They are written to apply to all 

eggs sold in the state, no matter where they are produced. This 

means that a farmer in Iowa will have to comply with California 

state standards because some 30 percent of the eggs sold in California currently come from Iowa. 

This helps you understand why we have a problem. Eggs move 

across state lines every day. This is how our business works. Virtually all states are either in surplus, meaning we produce more 

eggs than the population consumes, like Michigan, or in deficit, 

meaning that most farms are incapable of producing what the state 

consumes, like New York or South Dakota. 

Our farms cannot maintain a separate henhouse standard for 

every state where we want to sell eggs. And yet, that is pretty 

much where we are headed where the current patchwork of laws 

keeps expanding. Even already passed laws. Michigan’s standard is 

different from Ohio’s, which is different from Washington’s, which 

is different from Oregon’s, which is different from California’s. It 

actually gets worse. 

We sell to major food service and grocery customers who have 

outlets in these states. It would be an impossible task to keep track 

of which eggs were produced in which states, to meet all the different standards of every state where they have a store or a restaurant. You can see we are on a road to chaos. 

I also urge you to examine the House version of the Farm Bill. 

There is an amendment which encourages the exact opposite approach to a national standard. If Herbruck’s has to produce to a 

specific food safety and welfare standard and neighboring states do 

not, this will constitute an economic death sentence for our farm. 

The situation is the same for producers in California, Oregon, 

Washington, Ohio, and Arizona, and other states with similar 

standards. Unfortunately, the private sector alone cannot solve this 

problem. No matter what we do as producers voluntarily, we cannot avoid the threat of future ballot initiatives, and 24 states have 

them. 

So we are at the mercy of the next activist group that wants to 

mandate cage-free production in our state. We are convinced the 

only solution to this problem is a national production standard, as 

contained in Senator Feinstein’s bill, S.3239. This bill is the best 

solution for hen welfare, food safety, and consumer choice. 

It is essential to the Michigan egg industry that this legislation 

be passed as quickly as possible so we can stay in business. We 

strongly urge this Committee to support S.3239. Thank you. 

AGRIC-48812 with DISTILLER

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[The prepared statement of Mr. Herbruck can be found on page 

38 in the appendix.] 

Chairwoman STABENOW. Thank you very much. Mr. Baer, thank 

you, welcome. 

STATEMENT OF AMON BAER, OWNER, MENDELSON EGG 

COMPANY, LAKE PARK, MINNESOTA 

Mr. BAER. Thank you very much, Madam Chairwoman, Senator 

Roberts, thank you for the kind introduction, and other distinguished Senators of the Committee. Thank you for the opportunity 

for me to be able to testify today on behalf of Egg Farmers of 

America, to our opposition to S.3239. 

Egg Farmers of America is an association of over a dozen small 

and medium-sized egg family farming operations, including cagefree operators located throughout the Midwest. Senator Roberts did 

a very nice job of introducing me, so I will not re-introduce myself. 

Thank you. 

We have five primary reasons we are opposed to this bill. The 

bill will essentially kill the small family egg farmer. The bill will 

result in a dramatic increase in cost to consumers. The bill is not 

necessary. You would be establishing a precedent that could virtually affect all of the livestock industries. And S.3239 is not justified by science. 

Killing the small family egg farm. Egg production is a cyclical, 

high volume, very low margin business. This bill, if passed, would 

benefit the 180 or so mega-sized operations to the detriment of the 

1,800 other family farms. The experience of my nephew is an example of why this is the case. He has just installed new housing for 

200,000 layers, investing almost $2.5 million. 

That equipment system has a useful life of over 30 years. If 

S.3239 becomes law, he will be required to tear all of that equipment out and essentially start over just as he is getting his first 

set of equipment paid for. His replacement cost then to maintain 

his current production standards would be almost $5 million. In my 

40 years in the egg business, I can tell you there is no way that 

young man will be able to raise that kind of money in 18 years. 

Cost to the industry. In 1999, the European Union issued a similar directive requiring conversion to enriched housing over a period 

of 12 years. As anticipated, many producers waited until January 

and simply closed their operations due to the higher operating 

costs and capital investment required. 

European consumers have seen supplies cut by 20 percent and 

prices soar up to 55 percent higher. We can expect similar results 

in this country. UEP’s own economic analysis indicates that by 

2029, 65 percent of the production will still be in conventional 

cages at 67 inches. 

This law is unnecessary. Today, any egg producer who currently 

wants to produce eggs in enriched colony housing has the freedom 

and ability to do so. They do not need a Federal law to require 

them to produce eggs at that level. The Federal law is needed to 

push the small farmer out of business so there is less production. 

It sets a bad precedent. As a lifelong UEP member and UEP 

Board member, I am very sympathetic to the unfortunate situation 

faced by the egg farmers in California. Eric Benson mentioned that 

AGRIC-48812 with DISTILLER

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a lot of money was spent. My family sent thousands of dollars to 

help California try and defeat Proposition 2. But the problems of 

one state, even a handful of states, does not justify a Federal mandate in all 50 states. 

I agree with the California Congressman who recently said during the House Ag. Committee consideration of the Farm Bill, quote, 

We have a terrible situation created by the voters of California 

with the egg situation. Now that I am a retiring member, I can say 

that I do not always agree with what the voters do, and they in 

California made an awful mistake with regard to the poultry and 

egg situation. I certainly agree with that Congressman. 

After the 1999 EU directive, as many as 27 separate food safety 

studies were performed in Europe and the United States. None of 

the science conclusively points to improved food safety as a result 

of enriched housing. Additionally, the U.S. Department of Agriculture stated last July, Hens can experience stress in all housing 

types and no single housing system gets high score on all welfare 

parameters. 

On January 26th of this year, the American Veterinary Medical 

Association noted in a statement that, quote, Each of the additional 

features in an enriched colony has the potential to malfunction, 

causing injury, harboring disease vectors or parasites, or provoking 

aggression. 

Before concluding my remarks, I would like to state for the 

record that I personally, as well as others who oppose this legislation, have received threats in an attempt to force our support rather than oppose this legislation. We are evaluating those threats 

with lawyers and law enforcement officials. I wanted this record to 

reflect our concern so that its absence is not used against us in 

later legal proceedings. Thank you, Madam Chairwoman, for the 

time. 

[The prepared statement of Mr. Baer can be found on page 29 in 

the appendix.] 

Chairwoman STABENOW. Thank you very much. We will move to 

questions at this point. Mr. Herbruck, could you respond a little bit 

more to the challenge of patchwork of different state regulations? 

I know certainly in Michigan the state legislature, as you mentioned, passed a law that takes effect, I believe, like 2020. What 

Mr. Baer is talking about, a voluntary effort, why can we not just 

do this voluntarily as opposed to what is happening and how it affects the management decisions for you as an egg producer looking 

at the patchwork of different regulations across the country? 

Mr. HERBRUCK. Well, as I mentioned, we sell eggs in roughly 30 

other states, and with this continued expanding of individual state 

standards, we could have to have a chicken house for every state. 

And it is just impossible to manage that type of operation, as well 

as the logistics of moving eggs through a system, of what it takes 

to keep track of Ohio eggs versus West Virginia eggs versus Michigan eggs. 

And that is our concern, is that we will be having to do the logistics of that. Then our customer. If it is a centralized warehouse, 

they have got to say, Well, this egg has to go to Ohio or West Virginia or Michigan, and that is a real concern of where that patchwork is leading. 

AGRIC-48812 with DISTILLER

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Chairwoman STABENOW. Thank you very much. And I also want 

to thank you because you have been really at the forefront of 

proactively reacting to consumer interest, and so we appreciate 

that. 

Mr. Lathem, could you talk about the issue around prices for 

eggs that has been raised in terms of what this does to food prices 

and so on? If S.3239 becomes law, what will the consumer level impact on egg prices be and are there provisions in the bill that would 

ensure that egg prices do not dramatically increase as a result of 

what is proposed in these changes? 

Mr. LATHEM. Well, of course, egg prices always fluctuate. You 

know, the last two years, eggs have been as cheap as 75 cents a 

dozen. The market today, they are probably $1.60. We are affected 

a lot by the cost of our ingredients, and as we all know, corn and 

soy have gone very high, so we have always had a lot of prices. 

But we did have a study from Agrilytica Consulting and the work 

they did shows that over the 18-year phase-in time period, there 

is only about one-and-a-half cents per dozen, 1 percent extra cost 

from implementing this program. Even when we get through that 

phase-in period, we are looking at approximately 9 cents per dozen 

when everybody is in enriched cages. And we think that is a very 

reasonable number. It is less than a 5 percent increase from where 

we are today and we think that is very reasonable. 

Chairwoman STABENOW. And could you speak at all to the price 

increases in the European Union and what they have experienced? 

Mr. LATHEM. Yes, definitely. You know, we have done a lot of 

work on this legislation, and one of the things that we wanted to 

do is ensure that we did not have what happened in Europe. So 

we have a phased-in tiered approach where there are dates that we 

will raise the square inches per chicken, and unlike Europe, which 

did not do that. Europe had one final date that you had to go from 

existing housing to new enriched housing. So our legislation is 

much, much better, well thought out and well planned so that we 

will not have price spikes. 

Chairwoman STABENOW. Thank you. And Mr. Benson, in talking 

about the price differences from the standpoint of a producer, when 

you look at things like a depreciation schedule and so on for the 

traditional hen cages, what provisions are included in the bill to 

make the transition compatible with what you would do in the normal course of business as you make decisions? 

Mr. BENSON. We currently have a couple of houses on our ranch. 

I think my cousin put them in 1992 or 1993, and the equipment 

in those houses is in desperate need of replace right now. We do 

not know what we can put in there. That is obviously part of the 

uncertainty issue. But if you take a look at that, it is about 20 

years. 

The legs to the bottom of the cages are starting to rot away, the 

roll-outs where the eggs rolls out from underneath the hens is getting more wavy than it should, the belt feeder that goes down is 

going up and down and it is a much higher level of checks. It is 

time for us to replace the equipment in our Hilmar houses 3 and 

4. 

So from that experience—and that was good quality equipment 

that we purchased—other people may have different experiences, I 

AGRIC-48812 with DISTILLER

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do not know, but from our experience, we have got to do this in 

20 years. The equipment is just not as efficient. Today’s equipment 

is a lot better, it is designed stronger, the Dutchman equipment we 

put in is designed to last a long time, but once again, beyond 20 

years, I just—I do not think it is practical. We need to do it anyway. 

As far as depreciation schedules, you know, a lot of people say, 

Well, what does it cost? I have to say ongoing operating costs are 

very similar to what we are going to have today. People costs, a 

little different. The biggest difference is possibly a little bit higher 

feed costs. The biggest thing is the capital. At some point, you are 

going to have to get that money, but it is not—the rest of it is really no different. 

Chairwoman STABENOW. Thank you very much. Senator Roberts? 

Senator ROBERTS. Limited time. Amon, as a UEP Board member, 

did anybody from UEP give you any notice or contact you to tell 

you that UEP was negotiating this agreement? 

Mr. BAER. As a Board member, I was notified, but the UEP 

membership as a whole was not notified about the negotiation of 

this. I have a brother who has been a UEP member for 20 years 

and he knew nothing about it. 

Senator ROBERTS. After the deal was reached, were you ever formally polled to see if you supported the agreement? 

Mr. BAER. I am sorry. Somebody coughed behind me. 

Senator ROBERTS. That is allowed. 

Mr. BAER. But I am getting old. My hearing is not good anymore. 

Senator ROBERTS. Well, that is allowed, too. After the deal was 

reached, were you ever formally polled to see if you supported the 

agreement? 

Mr. BAER. No. The UEP membership as a whole was never asked 

to vote on this. 

Senator ROBERTS. All right. 

Mr. BAER. The only votes taken were Board members. 

Senator ROBERTS. If the Federal Government mandates the new 

standards described in this legislation, what will happen to your 

business? I think you pretty well answered that with your nephew 

who has expended 2 million bucks to basically modernize his operation, and you are indicating it could cost him $5 million. The folks 

to your left will say—your right, my left—will say, but they have 

got 18 years to do it. Any comments? 

Mr. BAER. Yes. I guess I would just like to say that my son is 

also looking at taking over my operation. I would like to sell it to 

him. My nephew, because he put equipment in two years, can 

produce eggs at 67 square inches up until 2029. My son, if he takes 

over my operation and puts new equipment in now, he will have 

to produce eggs at 78 square inches, at 90 square inches, at 101 

square inches, 113 square inches, and 124 square inches in threeyear increments. 

And because he is starting two years later, he will be locked into 

a more inefficient egg production system that costs more per dozen 

than his cousin, and he will be competing with his cousin at a two 

or three or four cent a dozen disadvantage for that entire period. 

My son will not be able to take over my operation and produce 

eggs for 18 years at that big a production cost deficiency. He is 

AGRIC-48812 with DISTILLER

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going to be competing with his cousin and the 70 percent of the 

other producers who are able to produce them at 67. 

Senator ROBERTS. You not only are into egg production, you have 

got a very diversified farming operation. Do you have concerns that 

a regulation like this will just lead to even more consolidation in 

what is already a very consolidated industry? 

Mr. BAER. Absolutely. My son is a prime example. He will simply 

not be able to borrow the money to put these new cages in if he 

has to be at a competitive disadvantage to 70 percent of the industry. 

Senator ROBERTS. Actually that was another question that I had. 

How have others responded to your opposition? Are you getting 

along with those folks on your right? 

Mr. BAER. I have a great deal of respect for all of my fellow producers. This one issue we disagree on entirely. I agree with all the 

points they made. I just do not think this is the proper solution. 

Senator ROBERTS. All right. You raised hogs. You mentioned in 

your testimony you are worried about the precedent that this legislation will set. Would you talk a little bit about your concerns? 

Mr. BAER. Yes. Proposition 2 did not only cover laying hens. It 

also covered hog gestation stalls, and that same issue is being 

played out in the hog industry right now. If Congress steps in and 

starts the process of regulating on-farm production practices, I do 

not think that HSUS or the animal rights groups or anybody else 

that is advocating for that will stop. They will continue to try and 

advocate and have the Federal Government set standards for all 

livestock. 

Senator ROBERTS. Mr. Lathem, UEP controls 90 percent of egg 

marketing. Is that about right? 

Mr. LATHEM. Yes, yes, sir. That is correct. 

Senator ROBERTS. UEP also has the UEP certified program that 

sets welfare standards. 

Mr. LATHEM. Correct. 

Senator ROBERTS. If you control 90 percent of the market and 

you have a welfare standard that should be available, knowledge 

to all consumers, why do you need the Federal Government to set 

a new standard? 

Mr. LATHEM. Well, what I think we found out in the egg industry 

is that truly the public is interested in our industry like never before. We do have an excellent program. It is size, space. It has been 

very well accepted. 

But what we have seen now is that people, our consumers, we 

see that through ballot initiatives, through our customers developing their own plans. We see that people want to be involved in 

how their food is produced. And what we need is a consistent, level 

playing field, everybody on the same program. We do not feel like 

it is right for some producers to stay in business while some others 

go out because they live in the wrong state or because the luck of 

the draw. 

We feel like that eggs should be produced humanely and consumers are going to have a right to say in that. And the main thing 

is, is something that we all can live with, and I think that is very, 

very important. 

AGRIC-48812 with DISTILLER

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Senator ROBERTS. If this bill were enacted into law and cage size 

is increased, what is the benefit to human, to human health from 

a food safety standpoint? 

Mr. LATHEM. Excuse me. Would you repeat that question? 

Senator ROBERTS. If this bill is enacted into law and cage size 

is increased, what is the benefit to human health from a food safety 

standpoint? 

Mr. LATHEM. Well, I think we produce very safe eggs today, the 

safest they have ever been, and I do not see that changing. I think 

we have safe eggs today. We will continue to have safe eggs. 

Senator ROBERTS. The hen housing requirement in the proposed 

rule calls for 116 square inches. Why are we considering a law that 

calls for 144 square inches for white eggs or, for that matter, 130 

or 150? Who decided on this number? How do you know this is exactly the right number of square inches? 

Mr. LATHEM. Well, we actually are not doing—it is actually 124 

inches, is the number. I think the other number that you quoted 

was for brown hens. For white hens, it is. That was a negotiated 

number, but there is a lot of science behind that. You know, this 

is not a new system for Europe. They have been working on this 

system for years, and we have relied on them and their number is 

116. So we negotiated 124, which is very, very close to the 116 

number that there is a lot of science that supports. 

Senator ROBERTS. You commissioned a report that says the investment cost for enriched cages was 24 bucks per hen for new construction, $20 per hen for renovation, plus another dollar per hen 

for perches and scratch pads. So that would equal roughly $8 billion to convert U.S. egg-laying houses over to the enriched system. 

Is this argument in favor of the bill, that no one will notice such 

a dramatic cost increase if they are spread out over several years, 

or what? That is 8 billion bucks. That is a lot of money. 

Mr. LATHEM. Well, I think, number one, $8 billion is a little on 

the high side. I do not come up with that figure and I build hen 

houses—— 

Senator ROBERTS. What do you think, six or seven? 

Mr. LATHEM. I think it could be as high as 6 billion. 

Senator ROBERTS. Six billion. 

Mr. LATHEM. But I also think it is very important that you realize that over the next 15 to 18 years, we are probably going to 

spend 3 billion anyway. So the incremental cost, I would say, would 

be closer to the 3 billion number. And when you spread that over 

the number of eggs, it comes up to one-and-a-half cents per dozen 

over the transition period and approximately nine cents when we 

totally complete the transition. Nine cents is about 5 percent of the 

cost of a dozen eggs. 

So we think it is very reasonable when, at the end of the day, 

all farmers are here to please the public and produce what they 

want. We do have to listen to the public and we hear what they 

want. 

Mr. BENSON. I can say, Senator Roberts, that our experience is around those numbers. $20.50 is the bid that I got to replace the 

equipment in our houses three and four, and 24 is about right to 

build from scratch the kind of scale we are talking about. But we 

do not plan to spend it all right away. 

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Senator ROBERTS. Mr. Benson, you got that right. You indicated 

that egg production costs are pretty stable and that as a consequence you could probably figure out what would happen in 18 

years. Are you aware of the drought that is going on here nationwide, Midwest, North Dakota down to Texas, second year for Kansas? We have pretty well burned up, and cattle and poultry are affected dramatically. 

I would expect that those consumer implications, while not immediate, that over the next year could be considerable. Note I 

should could be. We do not have all of the USDA figures. The 

Chairwoman and I are very concerned about that. Have you figured 

that? You do not know what is going to happen in regards to your 

cost of production. Of course, that is an impossible thing to determine. 

Mr. BENSON. Well, I mean, I think the cost of feed is the one of 

our biggest costs, and yeah, that is a real uncertain portion of what 

is going to happen going forward, but we live in a very competitive 

marketplace, and I know that the 5 percent that we are talking 

about or that we have talked about in the Agrilytica study, over an 

18-year period is a fairly low number compared to the amount of 

money that—or the amount of prices of eggs that have gone up and 

down over the last couple of weeks. 

These short-term fluctuations are one thing, but I also know 

something about the long-term trend. The long-term trend has 

been towards better technology, better production efficiency, and 

more room for the hens. It is how long the equipment lasts, 18 to 

20 years, like I said. We are pretty aware of some of the longer 

term trends. And quite frankly, if there is money in this business, 

people will expand production. 

Senator ROBERTS. Madam Chairwoman, I think they have already talked about the situation in the EU. When Europe implemented this and that, it was a 13-year phase-in, egg supplies. Apparently they waited until the last and then tried to implement it. 

Typical situation in the business community with a regulation, but 

that egg supplies plummeted 20 percent, egg prices soared 55 percent. I certainly hope that does not happen in the United States. 

Chairwoman STABENOW. Thank you very much. Before concluding the hearing, I would like to ask each of you, from your perspective, what the biggest challenges are for egg producers in the 

United States and what you see as the future of the industry over 

the next 20 years. Mr. Baer, would you want to talk about what 

you think the biggest challenges are from your perspective? 

Mr. BAER. Certainly the short-term challenges will be the feed 

costs, as Senator Roberts explained. The feed costs this year, who 

knows where they are going to end up at, and it is 65 to 70 percent 

of our total costs of production. 

On a long-term basis, there is going to continue to be consolidation. This type of a bill would accelerate that. It is just much easier 

for the big operators, the multi-million bird operations, to convert 

small percentages of their farms over. 

That works to the detriment of individual family farms like my 

nephew and my son who, when they make the conversion, basically 

because they have got one barn, they have to do 100 percent of the 

conversion right now. And that is why it does not work for the 

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small family farmer, and other concerns long-term, certainly as the 

activism from animal rights advocates and all the issues that surround that. Thank you. 

Chairwoman STABENOW. Mr. Herbruck. 

Mr. HERBRUCK. Good morning again. The corn prices and the 

grain prices are significant, but that is going to be impacted whether we have a conventional or an enriched cage. We will be dealing 

with that. Really the biggest concern is the uncertainty. I have a 

family. We are all family members and we hope to have a business 

we can share with our children and grandchildren for the future. 

Right now we have an uncertainty. As I mentioned, in Michigan, 

we are in a tough spot. If we do not do something to change the 

path, we could be significantly competitively unprofitable because 

if our peers in the neighboring states do not have to do things and 

we do have to follow a new standard that doubles our capacity, our 

customers love us, but they will move on. For a few pennies, they 

will move on. 

And so, the uncertainty. That is why we need this as a certainty 

so we can all make plans for our futures. 

Chairwoman STABENOW. Thank you. Mr. Benson. 

Mr. BENSON. I am afraid Mr. Herbruck has taken my major point 

and it is that uncertainty, especially in California. It is not just the 

various rules we have for various states. It is also the way that 

they are going to be interpreted, and the uncertainty that we have 

in whether or not what we are planning on doing complies with illwritten initiatives from various states. 

If the rules are not clear, much less whether or not there is a 

level playing field, but if the rules are not clear, we do not know 

what to do going forward and that puts our family in a difficult 

bind. 

Chairwoman STABENOW. Thank you. Mr. Lathem. 

Mr. LATHEM. I would say that they stole my point, too, but I really look at it a little different. I think it is really—that is why we 

are all here. That is why almost 50 percent of the U.S. production 

is represented here today. We are unified. We do need to know that 

we have a future. We need a level playing ground. 

The number one thing that scares me is, what kind of house do 

I build? Will my customers change their mind? Will I not be able 

to ship eggs? Will somebody from Iowa ship eggs to Georgia because they cannot go to California? We, as farmers and producers, 

our job is to look after consumers, to do a good job, to produce 

abundant, cheap, quality, high quality food that is safe, and that 

is what we want to do. 

But we deserve and want a level playing ground and that is why 

we are here today. Thank you. 

Chairwoman STABENOW. Thank you very much. And thank you 

to each of you. This is a very challenging issue because of what the 

states are doing, and I certainly know from Michigan’s standpoint, 

Mr. Herbruck, what you are talking about in terms of our Michigan 

producers and the patchwork effort that is going on across the 

country right now. 

So we thank you very much for being here. Mr. Lathem, you 

talked about coming together, of differing views, folks that normally would not be on the same side coming together and finding 

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common ground. We are used to doing that in this Committee. We 

sit around this table and do that. That is how we got a bipartisan 

Farm Bill and we are proud of that and how we were able to pass 

it in the Senate. 

So I am hopeful that we will be able to come together and find 

common ground on this very important issue for the egg producers 

across the country. 

Mr. LATHEM. It is important and we do appreciate the opportunity. 

Chairwoman STABENOW. Thank you very much. The hearing is 

adjourned. 

[Whereupon, at 10:41 a.m., the hearing was adjourned.] 

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