How will cage-free hens affect egg consumer choices?

Research team led by Vincenzina Caputo produced a report on the impact of transitioning to cage free eggs.

Recent inflation, supply chain issues, and avian flu outbreaks have led to a substantial increase in the price of eggs. But on the horizon is a series of legal mandates and private sector commitments to convert to 100% cage-free production by 2025. Adding these cage-free mandates and pledges to the mix could drive prices up even further, a burden that could be particularly detrimental to lower-income groups. 

MSU researchers worked to assess the impact of the cage-free mandates and pledges on U.S. egg producers, retailers, and consumers. Funded by the United Egg Producers and Food Industry Association, the project was led by Associate Professor Vincenzina Caputo and Ph.D. candidate Aaron Staples of the Department of Agricultural, Food, and Resource Economics (AFRE), along with scholars from Purdue University (Jayson Lusk) and Kansas State University (Glynn Tonsor).

“Cage-free” housing allows hens to roam in an open area or facility. Compared to conventional caged facilities, the hens can more easily spread their wings, exhibit natural behavior, and wander about.

“This project fulfills the mission of a land grant institution like MSU,” Caputo said. “Providing an economic assessment of market and producer impacts paints a clearer picture of the future market environment for producers, consumers, and other industry players. Likewise, it gives policymakers insights on how to react to these changes from a policy perspective, while also enriching the current debate on price inflation and cage free mandates/pledges.”

Cage-free facilities require approximately double the capital investment, more workers, specialized labor, and feed compared to caged facilities. Cage-free production also introduces additional variability and risk into the production system, including more intensive disease, manure, and better ventilation.

Even with the cage-free mandate deadlines looming in many states, just 29% of the industry was cage-free in 2020, and other barriers lie ahead. It takes two to three years to build new cage-free production facilities, there is confusion over the meaning of cage-free, and there has been an underwhelming demand for cage-free products. With these obstacles, it is important to evaluate the current state of the industry and consider the implications of this impending transition.

The research team conducted virtual interviews with the presidents and CEOs of some of the largest egg producers across the United States, including here in Michigan. In these interviews, the researchers learned about the challenges of cage-free production and gained an inside look at the industry leaders’ sentiments and perspectives on the transition.

“It was great to meet with several CEOs of US egg-producing companies and learn more about their production operations,” Caputo said. “Although among the largest in the world, most of these companies tell family stories and look at this issue from both an economic as well as sentimental perspective.”

The research team used what they learned to develop a survey to distribute to a wider range of egg producers. Along with a producer survey, the researchers conducted an online survey of U.S. consumers to understand their attitudes and preferences toward various egg products and policy options. They offered their perspective on the reasons for egg price increases and their thoughts on cage-free egg mandates and pledges.

“I think the research reveals it's all about communication. Communication to the consumer, the retailers, and the producers while trying to facilitate each relationship,” Staples said. “If we want to have a smoother transition to cage-free eggs, we're going to need to have clear, open, honest communication with one another.”

The full results of the study can be found here.


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