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Floor Speech

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Mr. REED. Mr. President, today I am introducing the Ending Taxpayer Support for Big Egg Producers Act. This legislation would help ensure that Federal funding intended to fight the avian flu outbreak is used responsibly to eradicate the disease and lower the cost of eggs, and does not go to large or highly profitable companies.

I have expressed concerns to both Democratic and Republican administrations that major egg producers may be taking advantage of the avian flu outbreak to engage in price gouging. The five largest U.S. egg producers control roughly half of the country's egg market, limiting choices for American consumers. I am glad that the Department of Justice has opened a probe into this potential anticompetitive behavior.

The fact is, egg prices remain high as companies continue to reel in profits. One company, Cal-Maine Foods, recently announced in an SEC filing that it is spending up to $500 million to buy back shares for the benefit of the founder's family. Cal-Maine also recently reported quarterly profits of $509 million, more than three times what it made in the same period a year ago.

Despite its tremendous profits, last year Cal Maine received $44 million in USDA indemnity payments to compensate for bird deaths due to the avian flu outbreak. It should be uncontroversial that a company that has earmarked hundreds of millions of dollars of cash on-hand and expected earnings for stock buybacks also has the resources to bear losses and implement biosecurity measures without taxpayer assistance.

There are also some very large private companies that have benefited from government assistance under this program. While these companies do not have access to liquidity from the public markets, their size and national scale provide them with greater access to funding from banks and other lenders on terms that are more favorable than those available to smaller private companies that operate regionally or locally. Further, any company that is private-equity backed surely has similar access to funding through the sponsor of the investment fund that owns the company.

This legislation would ensure that taxpayer funds to support egg producers will be made available to publicly traded or private equity- backed companies only if they will not pay dividends or buy back stock. To receive taxpayer assistance, these companies also must certify that they cannot access alternative sources of financing. There are strong penalties, including criminal liability, for falsifying these certifications.

As egg prices remain high, and the Trump administration limits Federal resources at the Department of Agriculture, we must ensure that these limited resources are used effectively to combat the avian flu and help producers who need it most, rather than highly profitable companies.

I urge my colleagues to join me in supporting this commonsense legislation.

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