Anti-Trump Indiana Senate Candidate’s Family Egg Farm, Other Major Egg Producers, Accused of Artificially Inflating Egg Prices

Indiana Republican John Rust officially announced his candidacy for U.S. Senate in a video last week focused heavily on the egg empire his family founded, Rose Acre Farms, but the company is one of several egg producers at the center of an antitrust lawsuit alleging they engaged in a conspiracy to limit the domestic egg supply, therefore driving up prices. 

Along with Rose Acre Farms, the defendants in the case are United Egg Producers, Inc., United States Egg Marketers, Inc., and Cal-Maine Foods, while the plaintiffs include four major food processing companies, General Mills, the Kellogg Co. Nestle, and Kraft Foods Global. 

As Reuters reported: 

Kraft and the other plaintiffs point to instances between 2002 and 2008 when eggs allegedly were sent out of the U.S. to limit supply and drive up prices.

The plaintiffs claim increased egg exports were part of a broad scheme to inflate prices in the U.S. They alleged the defendants also agreed to certain measures to reduce the number of hens to curb supply.

The food processing companies secured a victory in the case last week after U.S. District Court Judge Steven Seeger ruled that “Plaintiffs can introduce evidence showing that egg exports, in conjunction with Defendants’ other practices, were part of an unreasonable restraint of trade.” Evidence of egg exports is something the defendants had worked to keep from trial. 

“Defendants can argue to the jury that Plaintiffs have not proved that the restraints had an anticompetitive effect,” Seeger added.

Per the background of the case in Seeger’s order, plaintiffs argue: 

First, Defendants allegedly agreed to adopt animal-welfare guidelines (known as the UEP Certified Program) that increased the size of the enclosures housing egg-laying hens…  According to Plaintiffs, the agreement was not based on animal welfare. Instead, it was a ruse to reduce the total space available to house egg-laying hens.

…

 Second, Defendants allegedly agreed to increase egg exports, leaving fewer eggs for the domestic market… The exported eggs were sold at prices lower than the then-current prices in the United States… Needless to say, selling at lower prices is not usually the sellers’ first preference. But defendants allegedly made up for the lost revenue with the higher prices in the supply-constrained U.S. market…

According to Reuters, counsel for the defendants “argued that Kraft and the other plaintiffs could not prove that exporting eggs caused prices to rise in the U.S.” Neither representation for the defendants nor the plaintiffs provided comment to the outlet on the ruling. 

The decision comes on the heels of more price-gauging allegations against Rose Acre Farms and other industry leaders levied in January. Beth Musharbash, the legal counsel for Farm Action, wrote to Federal Trade Commission Chair Line Khan at the time, voicing “concerns over apparent price gouging, price coordination, and other unfair or deceptive acts or practices by dominant producers of eggs,” including Rose Acre Farms. 

A month later, Sen. Liz Warren (D-MA) and Rep. Katie Porter (D-CA) penned letters to Rose Acre Farms and other industry juggernauts asking them to “provide answers about the elevated price of eggs and the extent to which egg producers may be using fears about avian flu and supply shocks as a cover to pad their own profits.”

“In the midst of record-high egg prices, the largest egg producer in the United States announced a 65% annual increase in profits in the third quarter of 2022, and no positive cases of avian flu,” Warren and Porter wrote. 

Rust, who serves as Rose Acre Farms board chairman, launched his campaign announcement video on August 22, the same day as Seeger’s order.

“You’ve probably heard the phrase, sometimes you need to break a few eggs to get the job done. Let me tell you from experience it’s true,” Rust, a “gay conservative Republican,” said in the ad.

Breitbart News reached out to the candidate and a consultant for comment on Seeger’s ruling, but neither immediately responded.

Sources previously told Breitbart News that Rust is prepared to self-fund his challenge against popular conservative Rep. Jim Banks (R-IN), who is backed by former President Donald Trump in the Republican Senate primary. Notably, Rust’s social media activity indicates he is anti-Trump. 

In a statement to Breitbart News, Banks slammed Rust and Rose Acre Farms over the allegations.

“The cost of eggs skyrocketed even higher and faster than most other essential groceries. That’s because crooked companies like John Rust’s Rose Acre Farms colluded to gouge Indiana families,” Banks said. “Hardworking Hoosiers were already struggling to get by, and John Rust kicked them while they were down. People like that have no business in the U.S. Senate.” 

When rumors began to circulate of Rust’s candidacy in June, prominent MAGA Republicans, including Donald Trump Jr. and Sen. J.D. Vance (R-OH), doubled down in their support of Banks, an Afghanistan War veteran and former chair of the Republican Study Committee.

“Jim Banks is an incredibly strong America First conservative and it’s a shame that an establishment self-funder is even considering a challenge to him,” Trump Jr. told Breitbart News. “But rest assured, MAGA will fight like hell to ensure that Jim is victorious against any big money RINO who decides to run against him.”

“I really hope the rumor that establishment consultants are attempting to recruit a self-funder to run against Trump-endorsed Jim Banks in Indiana is wrong,” Vance said in a statement to Breitbart News. “It would be bad news for America First, but good news for the D.C. machine and their wallets. If it happens, you better believe that the entire America First movement is ready to go to war for Jim.”

The case is Kraft Foods Global, Inc. v. United Egg Producers Inc., No.11-cv-8808, in the U.S. District for the Northern District of Illinois.