Consumers in the U.S. have a wide variety of shell egg choices in retail stores. Eggs from hens in conventional cages, cage-free and free-range are available at most grocery stores as are eggs from hens fed organic, vegetarian and omega-3 fatty acid-enhanced diets. For the most part, the least expensive choice, eggs from hens housed in conventional cages, is still the winner at checkout with the vast majority of consumers.
Based on current U.S. consumer preferences, as expressed by actual purchase behavior, I have always assumed that a major change in husbandry practices at egg farms that greatly increased costs would lead to a significant drop in egg consumption. However, this has not been the case in Austria, where per-capita consumption increased slightly from 226 eggs in 2003 to 232 eggs in 2012. During this same time frame, the Austrian egg industry transitioned from having 53, 22 and 25 percent of hens housed in battery cages, cage-free and free range, respectively, in 2003 to 3, 67 and 30 percent of hens in enriched cages, cage-free and free range, respectively, in 2012.
According to International Egg Commission (IEC) statistics, Austria produced enough eggs to supply 92 percent of its shell egg needs, but only 82 percent of its combined shell egg and egg product needs in 2012. The IEC doesn’t have data on retail egg prices in Austria, but because shell egg production has increased by 17 percent during the transition out of cages, one could assume egg producers are at least breaking even.
So what does all this mean for egg sales in California? If only Proposition 2-compliant shell eggs are available in California, will per-capita consumption rise or at least not decline? If so, would this just be the result of the relative price inelasticity of demand for eggs or could it be that even though the majority of consumers won’t choose to pay more for “activist-friendly” eggs, they feel better about eating them?