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Food Safety and Processing Perspective

Terrence O’Keefe, WATT’s content director of agri-business, provides his perspective on developments affecting processing and food safety related issues in the poultry, egg and swine industries. Terrence has covered the poultry industry as an editor for over a decade and also brings his experience in plant management and live production to bear on today’s issues.
Cage-Free Laying Systems / Industry News & Trends / Business & Markets

US shift to cage-free eggs causing market disruption

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Rapid construction of new cage-free housing, along with conversion of existing houses to cage free, has resulted in a glut of cage-free eggs in the U.S. | Terrence O'Keefe

It will continue to be a bumpy transition for the cage-free egg market unless major egg purchasers set and stick to interim goals for cage-free egg purchases.

July 10, 2017

The future purchase pledges for cage-free eggs made by major U.S. retailers, food processors, restaurant chains and foodservice distributors generally have publicly announced fulfillment dates around 2025. The idea was to give egg producers up to nine years to convert facilities from cage to cage-free egg production. Egg producers have responded quickly to these purchase pledges and have been converting existing housing to cage free and building new cage-free facilities.

U.S. Department of Agriculture figures released on June 26 estimate the entire cage-free flock in the U.S. at 44.2 million hens, 29.0 million of which were non-organic cage-free. The non-organic cage-free hen flock in the U.S. totaled just 12.2 million less than two years ago.

The problem is that the market currently doesn’t want this many cage-free eggs. The negative impact of this cage-free egg surplus has been magnified by the fact that there is an oversupply of cage-produced eggs as well.

We all have to remember that individual consumers didn’t make pledges to buy cage-free eggs and these consumers will continue to buy what they want as long as they are provided a choice. I am a proponent of consumer choice; I would like to see retailers continue to provide consumers a choice in the type of eggs they buy. But if retailers are going to take away consumer choice, they will need to set and keep interim goals for cage-free egg sales to avoid a major supply mess.

Retailers need to start closing the gap between the retail price of cage-free and cage-produced eggs if they want to hit interim goals. Retail cage-free eggs sales aren’t going to go from 15 percent for a retailer to 100 percent over the next eight years without a reduction in the price differential and a lot of promotion.

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