The new organic rule could be expensive for egg producers

If the new rules are established, this will be yet another financial hoop for smaller U.S. egg producers to jump through if they produce for an organic market.

Meredith Johnson Headshot
Slobo Mitic |
Slobo Mitic |

The U.S. Department of Agriculture (USDA) proposed to amend the Organic Livestock and Poultry Standards (OLPS) rule with new requirements to enforce consistent standards for organic poultry and livestock on August 5, 2022. Additionally, the amendments will clarify existing requirements covering livestock care and production practices, such as what qualifies as an outdoor area.

Under the current organic rules, outdoor access practices for organic layers vary depending on the operation. While some egg producers provide large outdoor areas, others provide smaller screened or covered enclosures called porches that layers can access from inside the poultry house. Both scenarios are approved as outdoor access and both producers can label their eggs as organic.

However, the proposed rule would make porches a thing of the past, meaning that organic producers who use porches will need to build larger, and more expensive, outdoor areas within the grace period, depending on the scenario chosen in the proposal, if they want to stay in the market.

Additionally, some farms have organic houses built closely together or closely to non-organic houses. These setups make building a new outdoor area for each house complicated, or even impossible, due to the original setup, making the cost of construction even higher.

Organic standards for poultry have been a longstanding grey area for the egg industry. In addition, the rules have changed multiple times over the last 10 years, causing confusion for consumers. The newly proposed amendments are essentially the same OLPS rule that was withdrawn in 2018.

The egg industry has been hit hard financially 

If the new rules are established, this will be yet another financial hoop for smaller U.S. egg producers to jump through if they produce for an organic market. 

Organic egg producers would need to invest considerable amounts of money to meet the standards. Not to mention the extra personnel training and management the new systems will need and the known problems of access to outdoor spaces such as predators and exposure to disease to account for.

The Agricultural Marketing Service (AMS) estimates that the new rule will increase total production costs for broiler and layer operations to somewhere between US$9.3 million and US$14.6 million annually. In 2020, AMS published an Economic Analysis Report that revealed similar financial projections of implementing the original 2017 OLPS rule if all producers were to comply.

These new rules, on top of the state mandates and consumer pledges that have forced many U.S. cage-free egg producers to spend the millions of dollars to convert their facilities, have added up to a lot of money to invest and changes to make for the egg industry. I am not sure yet if this rule will force egg producers to update their facilities or go out of business like the cage-free side of the industry, but it does not help the situation. 

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