Business Ethos Blog

The Incredible, Edible Egg

Dr. David Mielke, Retired Dean, College of Business at Eastern Michigan University

Dr. David MielkeYou may remember this advertising jingle to promote one of the least expensive sources of protein. I imagine that many people followed an Easter tradition of coloring eggs and placing them in Easter baskets, or having an Easter egg hunt. A couple of weeks ago we talked about the move by many fast food and other restaurants to begin serving antibiotic-free chicken in response to concerns of health risks. Certainly, antibiotic free chicken feed will also impact eggs resulting in antibiotic free eggs. But is there another controversy affecting the egg market? Is there a concern about the treatment of chickens? Should the government regulate how eggs are produced? Is there a health concern—not for the eggs, but rather the chickens that lay the eggs? Should egg laying chickens roam free or live in roomy cages? What is the “Right Thing to do?” Let’s look at some issues:
1. The question as to how egg laying chickens should live is roiling the $9 billion US egg industry as producers grapple with new state laws and food company policies aimed at improving the well being of the country’s 305 million egg laying hens.

2. The revised rules target the cramped cages that have dominated the industry for decades, enclosures that typically confine birds to 67 square inches each. The small cages dominate the industry.

3. Many egg farmers are torn between 2 strategies: investing in expensive cage free facilities or building larger cages, a less costly move that generally complies with new laws, but does not satisfy all food purveyors and animal rights advocates.

4. In general, researchers found that the cage free system cost 36% more to operate than the small cage system. Mortality rates were double those of other systems, due in part to hens cannibalizing each other or excessive pecking. The hens also eat more because they are free to move around. Farmers say cage free systems cost roughly $10 a bird more than large cage facilities to build or about an additional $1 million for a barn containing 100,000 birds.

5. Cage free eggs fetch a premium, often doubling the price, but there is a question as to how large the market might become.

6. Setting off the latest egg farm conundrum was California, which in January began requiring every egg sold in the state to come from hens that have room to lie down, turn a circle and extend their wings. The state requires that each bird get at least 116 square inches of living space. Michigan, Washington, Oregon and Ohio have hen cage laws taking effect in coming years.

7. Wholesale egg prices in California jumped to more than $3.40 a dozen in January due to shortages, since then they have fallen to about $2 a dozen.

8. The Human Society of the United States is concerned about the well being of chickens and has studies that show that locking birds in cages causes them suffering.

9. Some major corporations including Nestle, Starbucks, Burger King and Aramark have unveiled plans to phase out the use of eggs from caged hens.

10. Demand for cage free eggs is small, but growing. Seventeen million US egg laying hens were cage free as of September, 6% of the US flock, up from 15 million 3 years ago.

11. A few years ago, the United Egg Producers, which represent most US egg farmers actually lobbied Congress to pass a uniform egg law. One reason was to eliminate the need to comply with a patchwork of state laws.

12. There is already a very complicated system of egg packaging, with terms that are not federally regulated. The terms can include organic, cage-free, free-range, all natural, pasture raised, vegetarian fed, Omega-3 and white or brown. Some cartons carry designations such as Certified Humane or Animal Welfare Approved, that come from third party auditors that certify specific farming practices are used.

Do we need federal regulations to determine how egg laying chickens are raised? Are changes to the industry more likely to be driven by market demand? Do we need animal rights groups to determine the standards for the industry? What about the increased costs to consumers? What is the “Right Thing to do?” We already have a variety of designations on egg cartons in the market, everything from organic to Omega-3, why not have one more designation–cage free or large cage and let the market determine which method is best and what the market demands? This egg controversy is incredible.