Thanks for your assurances, everyone.
I'm pretty sure that Megan is of the 'fertilizer comes in a bag' background, because the expression on her face when I told her that vegetables tend to be fertilized with blood and bone was pretty shocked and dumbfounded. (If it makes any difference, we live in a capital city and she comes from a very city-orientated family) She's such a nice lady, I feel guilty for staining her rose-tinted glasses.
Personally, I didn't see Megan as being rude for her own comment - though perhaps its because I know the audience. Everyone there is good about things to that nature, so no one was going to take the joke as anything but a joke.
I'll try to remember not to use my 'I assure you, it was killed very humanely - after all, I killed it myself' response at the dinner table anymore though.