Trouble may be looming for the storied Little Red Hen.
A group of egg producers, whose squawk is that egg surpluses are ruining their profits, wants government approval to limit egg supplies by buying up laying hens, taking them out of production and sending them to soup and pot-pie factories.
The industry wants the Agriculture Department to approve a federal marketing order that would empower a producer-dominated board to require egg handlers to finance a fund to purchase workaholic hens when the board decides that egg supplies and consumer demand are out of sync.
A reluctant USDA Agricultural Marketing Service, responding to the petition, is conducting hearings around the country to get comments on the industry's proposal. AMS chief James Handley said a final decision on the idea may be months away.
The marketing order has stirred opposition at the first two hearings and more is expected when groups such as the American Bakers Association, whose members are big users of eggs, enter the fray to protest that the plan would keep egg prices artificially high.
Raymond D. Lett, assistant secretary of agriculture for marketing and inspection services, agreed that the industry proposal runs counter to the spirit of the Reagan administration's long-held opposition to marketing orders that limit the amount of farm products moving into commercial channels.
"I have mixed emotions about letting it go this far," Lett said. "We're sort of like a reluctant bride. We don't like the whole thing, but these individuals believe they have a right to come in and make their points. A decision was made to let this go forward, on the basis that an earlier and more restrictive proposal was turned down.
"The proponents then changed some aspects of their proposal, and they got some commitments from the secretary and the deputy secretary that we would hear them out," Lett said.
Though the USDA has taken no formal position on the proposal, the Department of Justice, representing the administration, spoke against it at the first hearing in Atlanta this month. The Office of Management and Budget, an early critic of supply-limiting orders, has been barred by Congress from reviewing any such proposals.
Marketing orders were created during the New Deal era to allow financially troubled farmers to get better prices by regulating the flow of their products to market. There now are 48 orders for specialty products, from spearmint and hops to citrus and vegetables, with varying degrees of controls.
But the orders became controversial in 1981. News reports of the dumping of thousands of tons of navel oranges, kept from consumers by a marketing order, and an administration review of the marketing order system stirred the pot. Congress banned OMB reviews and limited USDA's powers to end orders.
Proponents of the egg marketing order think the critics are playing fowl with them. In Pennsylvania, the nation's third-largest producing state with 4 billion eggs per year, industry leader John Hoffman said the order is designed to stimulate consumption.
Hoffman argued that the hen-killing idea, called a surplus-removal plan in the proposal, "might look scary to consumers, but it would have little impact on them. It would take the peaks and valleys out of our marketing."
The industry's big problem, he added, is falling consumption. "Forty years ago, per capita consumption was 405 eggs per year. It is now down to 267 per year and the decline has become more marked. We lost five eggs per capita last year. Quite frankly, some of us feel that if we don't pass the marketing order and turn things around, the consumer will no longer purchase shell eggs," said Hoffman, head of the Pennsylvania Poultry Federation.
He said part of the industry's problem comes from consumer concerns about health aspects of eggs, particularly cholesterol, which has been identified as a contributor to circulatory ailments. "We're not doing innovative things, not promoting the product," he said.
To achieve that, the proposed order would impose a mandatory penny-per-dozen fee on egg handlers to finance an egg research and promotion program aimed at boosting consumption. The money also would pay egg producers to remove hens from production and send them to processors when retail surpluses loom.
Lett noted the egg-producing industry still is not unified behind the marketing order. Approval of the hearings did not mean the USDA backs the idea, he added, saying, "We warned that we didn't like the idea of killing hens and that if an order forced up the price of eggs, we'll be eating imported Canadian eggs for breakfast."
Cheep, cheep eggs, that is.