State regulators said Friday they were reviewing whether the Iowa feed mill where investigators found salmonella linked to the nationwide egg recall should have been licensed and inspected.

The mill at Wright County Egg hasn't been regulated by the state Department of Agriculture and Land Stewardship despite being one of the largest in the state. Its owners say the mill qualifies for an exemption allowing farmers to make feed for their own livestock.

Egg Recall: Complete Coverage

But the FDA reported Thursday that investigators found salmonella in feed mixed at the mill that was fed to chickens at Wright County Egg, located near Galt in northern Iowa, and at Hillandale Farms in New Hampton, about 95 miles away. The two farms have recalled more than 550 million eggs that have been linked to salmonella illnesses across the country.

If the mill provided feed to other farms, it wouldn't qualify for the exemption, which is meant to allow farmers to feed their own animals, said Dustin Vande Hoef, an Agriculture Department spokesman. He said an inspector will visit next week to comb through its business records.

He said the state would investigate whether Wright County Egg has an ownership stake in Hillandale Farms, if not, it would be ordered to either stop supplying feed to the farm or get licensed with the state, he said.

Wright County Egg spokeswoman Hinda Mitchell said Friday the company provides feed for one of Hillandale's sites and young hens to the other. The two farms say they have separate ownership but share some suppliers.

The department does not have the authority to level any penalties if the mill was improperly unlicensed, but the state attorney general could potentially pursue the matter if other violations are found, Vande Hoef said.

Wright County Egg said in a statement Thursday that salmonella was found in meat and bone meal provided by Central Bi-Products of Minnesota that is used as an ingredient for the feed it produces. The FDA said it was too early to confirm the source of salmonella, which was also found at other locations at Wright County Egg. Officials at Central Bi-Products have not returned phone messages.

Iowa regulates about 700 commercial feed dealers, periodically inspecting mills to ensure they do not have problems with rodents and have other measures to prevent contamination.

The Wright County Egg mill produces about 300,000 tons of feed per year — enough to fill roughly 12,500 semi trucks, said Kevin Klommhaus, who heads the department's Commercial Feed and Fertilizer Bureau.

He said its inspectors have been at the mill in the past only to make sure they were not making cattle feed with meat and bone meal that is prohibited to prevent mad cow disease. They were assured those materials were only being used to feed chickens on their farm and not cattle, he said.

State Sen. Gene Fraise, who heads the agricultural committee, said he would consider legislation to ensure that large feed mills have more state oversight.

"These big corporations, they are sliding under the radar screen because they say they are quote 'private farms,' " he said. "We ought to take a good hard look at that. If you get to a certain size, you are not a private farmer anymore. You are a corporation."