Cage-free practices pressure egg prices
Published
2/27/2023
The price consumers pay for eggs is beginning to decline from the 2022 highs, but pressure from some states and consumer groups to move the layer industry to a cage-free model now threatens to hit pocketbooks all over again.
The U.S. Department of Agriculture (USDA) reported in February that the wholesale price of a dozen large, grade A eggs had fallen more than $2 in January to an average of $3.78.
While good news for those who depend on eggs as a reliably affordable protein source, the cost of a dozen eggs is still more than 150% high than it was one year ago.
Potentially adding to price pressure is a series of legal mandates and private sector commitments to convert to 100% cage-free production by 2025, a goal that now seems unlikely.
According to a joint study conducted by researchers at Michigan State, Kansas State and Purdue universities, most consumers are motivated in their purchases by price, meaning if costs rise, they are likely to buy fewer eggs.
“Grocery shoppers do not understand transition deadlines and largely are unwilling to pay the premiums necessary to make the transitions cost-effective for egg farmers and their retail customers,” said Chad Gregory, president and CEO of United Egg Producers.
The drive to go cage-free means farmers and egg production companies must invest in expanding their facilities.
This, in turn, means they have to receive higher prices for the eggs. And those costs will be passed on to consumers.
The study notes: “Retailers will have to spend more on eggs to hold egg producers unharmed as they shift from conventional to cage-free eggs.”
Egg producers report that cage-free systems require at least twice the capital of conventional facilities and require two to three times more labor than conventional facilities.
Cage-free systems also require higher amounts of feed, diseases can be more widespread and it also increases some food safety concerns.
Right now, consumers pay anywhere from $2 to $5 more per dozen eggs for a cage-free product. The study indicated that the average price increase a U.S. consumer is willing to accept is about 30 cents.
The study found that if the cage-free prices remain unchanged and conventional eggs are removed from the market, the share of consumers choosing not to buy eggs could increase as much as 20%.
The U.S. Department of Agriculture (USDA) reported in February that the wholesale price of a dozen large, grade A eggs had fallen more than $2 in January to an average of $3.78.
While good news for those who depend on eggs as a reliably affordable protein source, the cost of a dozen eggs is still more than 150% high than it was one year ago.
Potentially adding to price pressure is a series of legal mandates and private sector commitments to convert to 100% cage-free production by 2025, a goal that now seems unlikely.
According to a joint study conducted by researchers at Michigan State, Kansas State and Purdue universities, most consumers are motivated in their purchases by price, meaning if costs rise, they are likely to buy fewer eggs.
“Grocery shoppers do not understand transition deadlines and largely are unwilling to pay the premiums necessary to make the transitions cost-effective for egg farmers and their retail customers,” said Chad Gregory, president and CEO of United Egg Producers.
The drive to go cage-free means farmers and egg production companies must invest in expanding their facilities.
This, in turn, means they have to receive higher prices for the eggs. And those costs will be passed on to consumers.
The study notes: “Retailers will have to spend more on eggs to hold egg producers unharmed as they shift from conventional to cage-free eggs.”
Egg producers report that cage-free systems require at least twice the capital of conventional facilities and require two to three times more labor than conventional facilities.
Cage-free systems also require higher amounts of feed, diseases can be more widespread and it also increases some food safety concerns.
Right now, consumers pay anywhere from $2 to $5 more per dozen eggs for a cage-free product. The study indicated that the average price increase a U.S. consumer is willing to accept is about 30 cents.
The study found that if the cage-free prices remain unchanged and conventional eggs are removed from the market, the share of consumers choosing not to buy eggs could increase as much as 20%.
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