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With the tsunami of cage-free egg purchase pledge announcements this year, you might think U.S. egg producers would be struggling to meet the surging demand for cage-free eggs, but that isn’t the case. A recent story on Marketplace explained how the current glut of cage-produced eggs has resulted in very low retail egg prices and that many consumers just aren’t willing to pay as much as $2 more per dozen eggs to get cage-free eggs.
The net result is that some of the increased production of cage-free eggs are being packed and sold as cage-produced eggs, because the market just isn’t absorbing the increased supply of cage-free eggs. Free markets have a very efficient, if sometimes painful, way of matching supply with demand. The story has Terry Pollard from Big Dutchman mentioning egg producers canceling or delaying orders for cage-free systems because of the current supply glut of cage-free eggs.
Delaying increases in cage-free hen housing as a result of the current supply-and-demand situation is a logical response by producers, but there is another option. At some point, won’t a retailer just decide to offer lower prices on cage-free eggs? If they do, we can learn how much of a premium consumers are willing to pay, and the market will sort out how much of a premium egg producers need to maintain cage-free flocks and to expand.
I hope the market is allowed to sort out what consumers really want, but I fear that pressure from activists groups will be enough to take away consumer choice when it comes to how U.S. hens are housed. I swore off shopping at BJ’s because of the company’s cage-free purchase pledge, but now all of my other shopping options have made similar pledges. If consumers keep buying less expensive eggs, will grocers really pull them off the shelves?