Michael Foods, the egg processing business owned by Post Holdings, has reportedly filed a lawsuit against Hawkeye Pride Egg Farms, a division of Center Fresh Group, alleging that it breached a supply contract after avian influenza hit the firm and prevented it from meeting its egg supply obligations.
Michael Foods argued that the disruption to its egg supply caused by Hawkeye's failure to deliver caused the group irreparable damage. According to local reports, the case was filed in a federal court in Des Moines, Iowa.
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Center Fresh had previously confirmed two cases of bird flu were detected at its farms in Iowa, affecting 5.5m birds. Meanwhile, Post said that around 20% of its own egg supply has been compromised by avian influenza. The company estimated that this will hit full-year EBITDA by approximately US$20m.
Representatives from Post and Center Fresh were not available for comment at time of press.
