Walmart-at-the-Crossroads-FINAL-06.04.15

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7. Egg Industry Eggs are a low-cost source of animal protein and have become widely popular among consumers in the United States. Similar to many of the other industries in this report, the egg industry is undergoing increasing consolidation. While in the past this sector was composed of many small producers, today’s operations are highly centralized and more specialized. In the early years of American agriculture, many farmers had chickens and collected eggs for their own consumption or for distribution within their community. Today, fewer farmers raise egg-laying chickens, and the farmers that do are the ones that specialize in egg production, meaning they maintain large flocks of layers for sale. 196 In September 2014, production of shell eggs reached 8.09 billion in the United States. The five largest egg-producing states – Iowa, Ohio, Indiana, Pennsylvania, and Texas – contain approximately 51 percent of all U.S. hens. 197, 198 There are currently 16 companies with greater than 5 million hens and approximately 63 businesses have more than 1 million hens. The companies with more than 1 million birds represent almost 87 percent of total egg production. 199 Despite increasing production and sales, the egg-producing industry has roughly half as many producers as it did 10 years ago. 200 Five main companies now dominate the egg production industry. The top five U.S. eggproducing businesses are Cal-Maine Foods, Table 5: Top 5 Egg Production Companies Food Company Cal-Maine Foods Rose Acre Farms Moark, LLC Daybreak Foods Rembrandt Foods Source: “Economic Data,” U.S. Poultry and Egg Association Rose Acre Farms, Moark, LLC, Daybreak Foods, and Rembrandt Foods. Field investigators from the FCWA confirmed that these companies are, in fact, the biggest suppliers of eggs to Walmart. 201 These five companies, however, have all violated labor and environmental standards. If Walmart wants to continue to receive eggs from these businesses, it must hold them accountable to the labor and environmental codes of conduct that have already been established. Number of Egg-Laying Chickens 33 million 22 million 13 million 13 million 13 million Page !45
A. Supplier 1: Cal-Maine Foods Cal-Maine produces and markets the largest number of shell eggs in the United States. In fiscal year 2014, the company’s sales represented about 23 percent of domestic shell egg consumption with approximately 1.014 billion dozens of shell eggs sold that year. Moreover, with about 32.4 million layers, Cal-Maine has the largest total flock of birds in the United States. This company exemplifies vertical integration with operations ranging from production, grading, and packaging to marketing and distribution of shell eggs. The majority of Cal- Maine shell eggs are sold in the Southeast, Midwest, Southwest and Mid-Atlantic regions of the U.S. Some of the products that Cal-Maine produces, markets, and distributes are private label specialty brands for grocery chains. The company’s customers include food service distributors, club stores, national and regional grocery store chains, and consumers of egg products. Some of its sales, furthermore, are completed through co-pack agreements. 202,* Table 6: Cal-Maine Specialty Egg Brands Brand Egg-Land’s Best® Land O’ Lakes ® Farmhouse® 4-Grain® Region Major metropolitan areas, states in the Southeast and South Central area of the U.S. Major metropolitan areas, states in the Southeast and South Central area of the U.S. Southeast and Southwest Nationally Source: Cal-Maine Foods company website For many years, Cal-Maine has pursued a growth strategy focused on the acquisition of existing shell egg production and processing facilities, as well as the construction of numerous “in-line” + shell egg production and processing facilities. 203 This company has accomplished 18 acquisitions both large and small since 1989. 204 Due to Cal-Maine’s acquisition strategy, the company’s total flock increased from approximately 33.5 million in 2009 to approximately 40.8 million in May 2014. Compared to net sales of about $928.8 million in fiscal year 2009, Cal-Maine has increased sales by more than $500 million in fiscal year 2014. 205 According to Cal-Maine’s annual report, 28.2 percent of Cal-Maine’s net *Co-pack agreements are a common practice in the industry where production and processing of certain products are outsourced to another producer. + In-line operations refers to eggs that are “produced and packaged for shipping to retail markets on the farm.” On the other hand, “off-line operations produce eggs in one location and transport them to another location for processing.” Page !46
Page 1 and 2: Walmart at the Crossroads The Envir
Page 3 and 4: Table of Contents I. Introduction:
Page 5 and 6: B. Supplier 2: Pilgrim’s Pride/JB
Page 7 and 8: supply chain practices have been re
Page 9 and 10: Labor II. Walmart’s Labor and Env
Page 11 and 12: • Handle, store and transport haz
Page 13 and 14: III. Overview of Walmart’s Record
Page 15 and 16: pay their workers unfair wages and
Page 17 and 18: energy consumption derived from ren
Page 19 and 20: V. Industry Reports Along with the
Page 21 and 22: A. Supplier 1: Monterey Mushrooms,
Page 23 and 24: C. Supplier 2: Giorgio Foods, Inc.
Page 25 and 26: 2. Blueberry Industry Blueberries a
Page 27 and 28: Table 2: Naturipe Facilities in the
Page 29 and 30: B. Profile: Wage Theft in the Blueb
Page 31 and 32: known for its devastating environme
Page 33 and 34: prominent supplier to Walmart, yet
Page 35 and 36: A. Supplier 1: Chiquita The United
Page 37 and 38: B. Supplier 2: Del Monte In additio
Page 39 and 40: iii. Environment In addition to hav
Page 41 and 42: 5. Packaged Salad Industry Packaged
Page 43 and 44: days even though he attributed this
Page 45 and 46: parts of their wages go to the empl
Page 47 and 48: Fred Penny is first vice chairman o
Page 49: product cost from wages if a distri
Page 53 and 54: to roughly 10,000 cages in each bar
Page 55 and 56: no authority under the federal wate
Page 57 and 58: 8. Dairy Industry The dairy industr
Page 59 and 60: In 2010, the Obama administration d
Page 61 and 62: Nestlé’s issues with labor do no
Page 63 and 64: Walmart, including its subsidiaries
Page 65 and 66: United States. In fact, Joel was on
Page 67 and 68: cooperative joined the fluid milk b
Page 69 and 70: Another significant problem in the
Page 71 and 72: sectors. Common violations at poult
Page 73 and 74: during incidents at facilities in K
Page 75 and 76: the company in any of these cases.
Page 77 and 78: in getting the “Humanely Raised
Page 79 and 80: labor rights are violated. The adde
Page 81 and 82: chain. “Walmart has still failed
Page 83 and 84: B. Environment Besides troubling la
Page 85 and 86: dollars in yearly revenue, 407 Schn
Page 87 and 88: i. Labor In December 2012, UNFI was
Page 89 and 90: money to non-profits “committed t
Page 91 and 92: Former Walmart President and CEO Mi
Page 93 and 94: 4. Does the price they receive, aft
Page 95 and 96: VII. Conclusion and Recommendations
Page 97 and 98: fact, Walmart’s business model ha
Page 99 and 100: 4. Establish a 40-hour minimum for
Page 101 and 102:
Endnotes and Citations 1 “Our Loc
Page 103 and 104:
46 Stacy Mitchell, “Walmart’s A
Page 105 and 106:
89 “Memoria Anual Hortifrut S.A.
Page 107 and 108:
135 “Fresh Del Monte Produce, Cor
Page 109 and 110:
182 “Flowers Foods Investor Fact
Page 111 and 112:
232 Ibid. 233 Ibid. 234 Ibid. 235
Page 113 and 114:
282 Ibid. 283 Dale Heberlig, “Off
Page 115 and 116:
332 “Tyson Fact Book,” Tyson Fo
Page 117 and 118:
377 “Seafood Statistics,”Statis
Page 119 and 120:
428 Ibid. 429 “United Natural Foo
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