Cage-free

John Phipps: Eggs Are Proof Grocery Shoppers Will Pay for Preference

Tue, 13 Jul 2021 20:38:21 GMT

I’ve spoken before about the challenging economics facing egg producers. Well, it hasn’t gotten any easier. Since the introduction of specialty eggs such as cage free, organic, brown, free range sustainable and now regenerative, the egg market has defied supply and demand axioms. Now comprising 30% of the egg market, and predicted to command 70% in five years, specialty eggs sell for four to six times the price of ordinary eggs.

Here’s a picture from my local Walmart.

As you can guess, this is not an upscale retail outlet in a wealthy trend conscious suburb. This is farm country in the Midwest. And if Walmart is doing it, it’s not a snobby whim. Since once they’re out of the shell, eggs are all pretty much the same, although I can taste and see the difference in same day fresh eggs. Other than that, even consumers like me who are big egg fans struggle to identify any differences in taste or texture.

Perhaps the staggeringly low cost of eggs is actually part of the marketing mystery. At 98 cents per dozen, that’s eight cents per egg. I think they are the greatest protein and nutrition source of our diet. But raising the price four-fold still looks cheap, especially when situated next to the meat section.

Consumers can indulge in legitimate or questionable characteristics for essentially pennies, and they are. Years ago egg producers warned that the forced change away from cages would hurt demand but they clearly misread consumer preferences and the willingness to pay. Cheap food is not the rallying cry when incomes rise to a certain level, or for already cheap products, perhaps. Introducing regenerative - a loosely defined term at best - into the marketing mix will be instructive. They will retail for - brace yourself - eight to nine times the regular eggs.

If that works, and market share or specialty eggs continues to grow, the producers who took the chance and invested in new practices and facilities will have competitors scrambling. I’m sorry, I couldn’t help myself.

Companies Are Rushing to Meet Cage-Free Egg Deadline

Tue, 17 Nov 2020 04:17:22 GMT

As consumers clamor for cruelty-free protein at the grocery store and in restaurants, big food is obliging them -- hundreds of companies have pledged to sell only cage-free eggs by 2025, for example.

But has Corporate USA bitten off more than it can chew?

Producers are trying to create new housing for more than 300 million egg-laying hens across the U.S. -- a gargantuan change that can’t happen overnight. Currently, the country is only about a quarter of the way to those commitments, according to Christine McCracken, a protein analyst at Rabobank, a Dutch lender specializing in food and agriculture. The Egg Industry Center at Iowa State University, meanwhile, uses USDA data to estimate that about 17 percent of output is now cage-free, including organics.

Going forward, the transition will cost companies, which include Walmart Inc., McDonald’s Corp. and General Mills Inc., about $7 billion, McCracken predicts. That forecast is “roughly correct,” according to the EIC.

To nudge the industry forward as it confronts this task, the Humane Society of the United States recently sent out a survey to the 100 biggest food companies, asking them to report advances they’ve made in the treatment of livestock like pigs and chickens. It’s also requesting information about companies’ ability to comply with new state laws, like California’s recent mandate on animal housing, and details on what they’re doing to add more plant-based options to their menus. Responses are due June 1.

“Consumers and investors are going to have an opportunity to see which companies actually live up to their policies,” said Josh Balk, vice president of farm animal protection for the Humane Society.

Some companies are ready to report on their progress, while others are more reticent. Kraft Heinz Co. said it now sources 60 percent of its eggs as cage-free or free-range globally. General Mills reached 40 percent cage-free worldwide in 2018 and Campbell Soup said it’s at 16 percent. McDonald’s declined to comment on its progress and Walmart didn’t respond to inquiries.

The changes -- which often include the planning, permitting and building of new barns -- aren’t easy to make.

“It’s a major construction project,” said Brian Moscogiuri, an egg market analyst with Urner Barry.

But the pace will accelerate, Rabobank’s McCracken said. She cited Proposition 12 in California, which passed in November and established more humane housing requirements for all eggs, pork and veal sold in the state by 2022. As part of these rules, all eggs sold will have to come from hens that are cage-free.

‘Entirely Different’

“It’s an entirely different way of raising animals,” McCracken said. “It takes some learning on how to do that well. It’s a slow conversion.”

There is no uniform cage-free system, but the United Egg Producers mandates that each bird have 144 square inches of space. Caged systems, meanwhile, provide 67 to 86 square inches. The new spaces must allow birds “to exhibit natural behaviors” -- so housing features like scratch areas, perches and nests are common. These spaces are also more expensive for producers, because they require more labor and can be less productive.

Even so, food-service operators haven’t raised prices, as the higher cost of production is still just a small part of the price of a menu item like an egg sandwich. At the retail level, cage-free egg sales rose 10 percent in the 12 months through Feb. 23, according to data from Nielsen. But those gains are largely driven by distribution into new stores, according to McCracken. Not all cage-free eggs find a home, either, Moscogiuri said, meaning they are sold as commodity eggs and the producer loses the premium.

Panera Bread, which was 14 percent cage-free according to its 2017 animal welfare report, is working to change the way it buys eggs, said Sara Burnett, the company’s director of wellness and food policy.

“We have to rethink our supply chain contracts to make sure we are being good partners to these farmers,” she said. The chain is using longer-term contracts to help cover upfront capital investments as egg producers transition to the new barns.

Companies have also made commitments to produce antibiotic-free chicken and gestation crate-free pork -- which means female pigs aren’t packed into tiny containment areas for most of their lives.

With 2025 six years away, McCracken expects food service to hit their targets on cage-free eggs. But she isn’t convinced about retailers. Balk, meanwhile, is more optimistic.

“I expect by 2025 virtually every single egg-laying hen to be in a cage-free facility,” he said. “There may be some outliers that have to be spotlighted so they comport with the norm.”

13 States Sue to Stop Cage Free Eggs Law in Massachusetts

Tue, 17 Nov 2020 04:17:16 GMT

BOSTON (AP) — Massachusetts is being sued by 13 other states that claim a voter-approved law to ban the sale of eggs and other food products from farm animals that are confined in overly restrictive cages is unconstitutional.

The states, led by Indiana, filed the lawsuit with the U.S. Supreme Court last week. It follows another action filed by more than a dozen states earlier in the month against California, which has a similar law.

The 2016 ballot question in Massachusetts was backed by more than 77 percent of voters. It requires, among other things, that only cage-free eggs be sold in the state by 2022, regardless of where the eggs were produced.

The law backed by animal protection groups defines an overly restrictive cage as one that would prevent an egg-laying hen, breeding pig or calf raised for veal from standing up, turning around or fully extending its limbs.

In their compliant, the states claim that Massachusetts is attempting to impose its own regulatory standards on farmers in other states, in violation of the commerce clause of the U.S. Constitution.

The plaintiffs claim farmers “will have to increase their production costs by decreasing flock or herd size, investing in new infrastructure, and undertaking contentious zoning approval processes.”

“If they do not, they must forego completely any sales in Massachusetts or to national distributors that may resell products in Massachusetts,” according to the suit.

Democratic Attorney General Maura Healey’s office said it had received the lawsuit and was reviewing it, but had no additional comment.

Paul Shapiro, vice president of policy for the Humane Society of the United States, said opponents of the law are “grasping at straws” and he expects the legal challenge to fail.

“Massachusetts has an interest in protecting its consumers from inhumane and substandard production of eggs,” said Shapiro, who noted that the state is applying an even standard by requiring the same conditions for housing animals at its own farms.

Alabama, Arkansas, Louisiana, Missouri, Nebraska, North Dakota, Oklahoma, South Carolina, Texas, Utah, West Virginia and Wisconsin also signed on to the lawsuit. The states said it filed the action directly with the Supreme Court because it has jurisdiction over lawsuits between states.

Critics of the cage-free laws also argue they result in price increases for consumers. The Missouri-led suit filed Dec. 4 against California claims that state’s law, which took effect in 2015, has cost U.S. consumers up to $350 million annually in higher egg costs.

Shapiro said most studies have predicted the Massachusetts law would add only a penny or two to the cost of an egg.

Copyright 2017, The Associated Press