There has been yet another recall of packaged eggs in the U.S., which is in itself disturbing, but also brings out important aspects of supply risk concerning supply chain custody and brands.

Cal-Maine Foods Inc., one of the leading egg sellers and distributors in the U.S. was notified by the Food and Drug Administration (FDA) that one of the Company’s suppliers, Ohio Fresh Eggs, LLC, based in Croton, Ohio, had a routine environmental study sample which tested positive for Salmonella Enteritidis (SE), the same strain involved in the massive August recall of eggs. Cal-Maine purchased approximately 24,000 dozen unprocessed eggs from Ohio Fresh, which were processed and re-packaged by the Cal-Maine’s Green Forest, Arkansas, facility between October 9 and 12, 2010. The potentially contaminated eggs were packaged under four separate brands ( James Farm, Springfield Grocer, Sunny Meadow, Sun Valley) and distributed to food wholesalers and distributors in eight U.S. states.

A Los Angeles Times Business article further indicates that Ohio Fresh Eggs has some financial ties to Austin “Jack” DeCoster, whose Wright County Egg was one of two Iowa farms involved in the massive August recall of potentially Salmonella contaminated eggs.  The LA Times article further notes that the Oho Agriculture Department had indicated earlier this year that DeCoster was still an investor in Ohio Fresh Eggs, and neither company could be reached for comment.

This latest egg-related recall reinforces some rather important aspects on which entity holds the burden of product risk and/or liability.  It is also another clear reminder that in the case of supply chain distribution, your supplier’s quality issues are ultimately your own, especially when your brands are involved. Cal-Maine’s marketing tag line is the most obvious reminder: “When it comes to eggs, we are at the center of it all.

A Cal-Maine Foods statement confirms the recall and indicates that the company was only notified by the FDA on November 5th and re-iterates that the eggs were not produced from Cal-Maine flocks.  Cal-Maine distributes its egg products to approximately 29 U.S. states and the recall reinforces that fact that this company’s supply chain includes other egg producers.  An CBS News article published in late August notes that in the previous egg recall incident, Cal-Maine received 32 truckloads, roughly 800,000 dozen eggs from two suspect Iowa egg farms in the period between April 9 and August 19, all of which were included in the August product recall. At this point, we now  know of at least two incidents, and that over one million eggs have had to be recalled by Cal-Maine, most of which originated in facilities not controlled by that company.

There are certainly other larger issues at play, including how big is big, the breakdown of quality in the egg production supply chain, and consumer trust of distribution brands.  This would include private brands.

One thing is certain, supply risk is an important aspect and a growing concern to many current supply chains.

What’s your view?  Which participant in the supply chain holds the ultimate responsibility for product quality and safety?  I’ll bet I know the answer.

Bob Ferrari