Market Will Dictate the Future of Cage-Free Eggs

March 21, 2016

By Austin Alonzo

A pair of polar opposites agreed about one thing on a forum about the future of cage-free egg production: the market, not the egg producers, will set the course for cage-free eggs in the U.S.

Ken Klippen, executive director of National Association of Egg Farmers, and John Brunnquell, president of Indiana-based free-range egg producer Egg Innovations, argued their case for and against expanding cage-free production at a workshop at the Midwest Poultry Federation Convention. The March 17 session in St. Paul, Minnesota, drew a standing room-only crowd.

The speakers agreed that the egg industry reached a tipping point in September when McDonald’s Corp. announced its commitment to only purchase cage-free eggs in the U.S. and Canada within 10 years. Since then, more restaurants and grocers have made their own cage-free pledges. The wave of demand for cage-free eggs is pressuring egg farmers to rethink their production processes or risk losing a market for their product.

The case against cage-free eggs

Klippen argued expanding cage-free production – the forced move to cage-free, as he called it – is bad for the consumer as well as the producer and could represent an existential threat to the industry itself.

Referencing recent comments from animal welfare activists, he said the move toward cage free is just “yardage” toward the groups’ ultimate goal of dismantling the egg industry entirely. The activists have succeeded in getting the biggest food retailers to make cage-free pledges, now they are fighting to bring food production companies and eventually the farms themselves to make similar pledges, he said.

Cage-free eggs, Klippen said, will represent a health risk to the birds, the workers in the houses and potentially the consumer. He said removing layers from cages, where they have been for decades, will lead to issues with pecking and other social behaviors prevented by a cage environment which, he said, is inhumane. The eggs are more likely to be contaminated with bacteria due to prolonged exposure from litter and manure in the nest boxes. As for the workers, Klippen said the amount of dust, which can transmit pathogens, inside a cage-free house represents a health risk to farm workers, and the need for workers to collect floor eggs creates ergonomic challenges, too.

The cost of the transition to cage free is also problematic, Klippen said. More resources – feed, labor and money – are necessary to produce the same amount of eggs as conventional systems. Eggs from aviaries will cost as much as 37 percent more than conventionally raised eggs.

Klippen vowed that his group will “never surrender” in its fight against forced expansion of cage-free production. He said the consumers, the market the egg industry serves, deserve to have a choice, rather than being forced to pay higher prices for cage-free eggs.

The case for cage-free eggs

Brunnquell vehemently disagreed with Klippen’s argument that cage-free eggs are less safe for consumers and cruel to animals. Taking the animals out of the cages allows the birds to exhibit more of their natural behaviors and, in the case of free range, gives hens an environment closer to their ancestral biome.

As for the cost issue, Brunnquell couldn’t speak for transitioning from cages to cage-free, but he said starting up a free-range operation can cost as much as $800,000.

Beyond animal welfare and health issues, Brunnquell said he and Klippen are in agreement that the egg industry should let the market determine its path. However, Brunnquell thinks egg producers need to pay attention to what the market’s future, the millennial generation, wants.

He said the under-35 demographic is quickly becoming the most important consumer group, and the group’s values will reflect heavily on its future buying decisions. The group is distrustful of “big food” and wants to know more about where its food is coming from. Most importantly, they are willing to pay a premium price in order to act on their values. As many as 83 percent of millennials, he said, are specialty egg customers, and research shows they are willing to put taste, animal welfare and additive-free production ahead of pricing.

Brunnquell said free-range farming is not perfect, it’s a management challenge, and poorly managed operations can underperform, but the market is trending toward more demand for specialty eggs.

“This has nothing to do with the egg industry. This generation is going to have the same thoughts and value statements across all their shopping habits. (Millennials are) the real consumers that are driving change,” Brunnquell said. “Where we end up in the discussion of cage-free I don’t think is for us to debate. I think we have to respond to the marketplace: If the marketplace wants it, we should be there for them. If the marketplace doesn’t want it, we shouldn’t be there.

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