The egg price settlement filed on Thursday makes Cal-Maine explain every bid it deletes, in writing and under penalty of perjury, twice a year for five years

"As a group we need to bid like they vote in Chicago, early and often."

The Justice Department attributes that sentence to the chief executive of a co-operative its complaint declines to name, writing on 21 December 2022 to senior executives at Cal-Maine Foods, Versova and Hickman's Egg Ranch. The complaint was filed on 29 June in the Northern District of Iowa. On Thursday morning the department lodged the proposed settlement of it for publication in the Federal Register, which starts the 60-day comment period the Tunney Act requires before a judge may enter a consent decree.

Sixty days. Then a judge decides.

What is alleged

The United States and 17 states allege that between June 2022 and March 2025 the defendants agreed to submit bids intended to move a price benchmark rather than to buy eggs.

The benchmark is published by Urner Barry, a price reporting firm whose daily quotations for shell eggs are written into contracts between producers and grocery chains and restaurants. Urner Barry sets those quotations partly from bids, offers and trades on the Egg Clearinghouse exchange, and it reads each one as premium, discount or supportive, meaning as evidence that the published price is too low, too high or about right. The complaint says the defendants understood the mechanism precisely and worked it.

Five methods are alleged: bidding in volume, spreading the bids across several apparently unrelated firms, concentrating them in the hours before the daily quotation is set, placing bids unlikely to be filled, and executing premium trades away from the exchange but still reported to Urner Barry.

One passage describes the last of these plainly. In August 2023 a Cal-Maine executive is alleged to have texted a Versova executive that the market reporter "needs premium trades to hang her hat on", after which the two firms executed three private trades at premium prices and Cal-Maine sent the purchase orders to Urner Barry.

The paperwork the settlement buys

The proposed judgments seek no money. They run five years from entry and they are almost entirely about documentation.

Each defendant must file, twice a year, a certification from its general counsel under penalty of perjury that it did not communicate with a competitor about bids it knew were not based on legitimate business needs. Alongside that certification goes a written explanation, also under penalty of perjury, for every bid the defendant deleted from the exchange before the bid would have expired on its own. The explanation must carry the date and time of the bid, its identifier, its dollar value, when it was deleted and why.

That requirement is aimed at a specific paragraph of the complaint. On 22 December 2022, one Versova executive is alleged to have told another to place bids two cents above the published Northwest quotation, and then, when a seller moved to fill them, to delete the bids because the company did not need the eggs.

Each defendant must also appoint an antitrust compliance officer within 60 days, approved by the United States in its sole discretion, who audits compliance twice a year and monitors any co-operative meeting where the supply, demand or marketing of eggs is likely to be discussed.

What a legitimate bid is

The judgments define the term rather than leaving it to argument, and the definition is the most portable thing in the document.

A bid fails the test if the buyer does not need the eggs, if the price is known to be higher than necessary, if the quantity is known to be greater than needed, or if the bid is placed with no intention of transacting on the terms offered. An honest mistake is excluded. The assessment is made at the moment the bid goes in, and the judgments say expressly that anything learned afterwards does not change it.

There is a matching narrowness on intent. A bid counts as intended to affect a benchmark only where affecting the benchmark was a known purpose. Knowing that a bid might move the number is not enough.

The status of all of it

The consenting defendants agreed to entry without trial and without the taking of testimony, and the judgments state that they constitute no evidence against, and no admission by, any party. Nothing has been proved. No defendant response is carried here and none was sought.

The judgments expire five years after entry, or after four years if the United States moves to end them early. For four years after that, the department may still sue over a violation committed while they were in force.