Several states and retailers set 2026 as the deadline for egg producers to transform their operations to cage-free systems, a move that many saw as what consumers wanted. But egg farmers say they need more time.
A study published in February by the FMI Foundation and United Egg Producers pointed to the high cost of upgrading facilities to accommodate cage-free production as hampering the transition. Cage-free machinery, particularly aviary systems that allow for increased movement space, can cost over $40 per bird.
“Because of the dollar investment that is required to move that way, it’s not moving at a fast pace,” said Kenneth Anderson, a commercial layer and small flock management professor at North Carolina State University’s Prestage Department of Poultry Science
When the conversion to cage-free production began in earnest in 2014, Anderson said experts estimated that it would cost the industry roughly $10 billion. The cost already has outpaced this figure, he said.
Long advocated for by animal welfare activists once food companies, such as Nestlé and Conagra — along with retailers, such as Whole Foods and McDonald’s — made pledges about a decade ago, a shift to a national cage-free egg production system seemed imminent.
At least nine states — from California to Massachusetts and Utah — passed laws requiring all egg-laying hens to be housed in cage-free environments by 2024 and 2026. California’s 2018 ban took effect last year.
After California’s law, known as Proposition 12, took effect, egg prices in that state increased dramatically. Californians paid $5.62 for a dozen eggs in early February, compared to $3.05 for non-cage free eggs in the Midwest, according to The Wall Street Journal.
Research published in the American Journal of Agricultural Economics projected the law will result in an annual loss of $23 million for consumers in the state.
And with another outbreak of the highly pathogenic avian bird flu (HPAI), conversations about eggs across the U.S. center around cost as egg prices jumped astronomically in the last year. Accusations of price gouging from consumer advocacy groups have called the motives behind price increases into question and have accused some companies of taking advantage of the bird flu situation.
Prices of eggs at the grocery store jumped 70.1% in January compared to 12 months prior, according to the most recent Consumer Price Index from the U.S. Bureau of Labor Statistics. The price of a dozen extra large brown cage-free eggs was $4.79 as of Feb. 1, according to the USDA, compared to $2.66 the same time a year ago.
What could help cage-free make its deadline?
In the FMI study, egg producers offered that the biggest limiting factor to the adoption of cage-free production is capital.
Overall costs of cage-free production are estimated between 8 and 19% more than non-caged, which includes additional labor costs.
FMI and United Egg Producers found that while many states have deadlines of 2026, it may take longer for the whole country to adopt the practice. Extending the deadline, along with government assistance, could allow more time for the industry to construct the needed facilities and acquire the necessary operational equipment, the study authors said.
Major retailers, such as Walmart and Kroger, already have backed out of their commitments to supply 100% cage-free eggs by 2025.
After California’s cage-free law, known as Proposition 12, took effect, egg prices in that state increased dramatically. Californians paid $5.62 for a dozen eggs in early February, compared to $3.05 for non-cage free eggs in the Midwest, according to The Wall Street Journal.
Research published in the American Journal of Agricultural Economics projected the law will result in an annual loss of $23 million for consumers in the state.
Currently cage-free eggs make up 34.6% of the total egg-laying flocks in the U.S., according to WATT Poultry. Half of U.S. egg-laying hens are predicted to still be housed in cages in 2025 — and it’s unlikely that 100% will be cage-free by 2040 — according to producers surveyed by the egg industry outlet.
Some companies are holding off on adopting cage-free systems because many consumers are not willing to pay the premium prices for the eggs, Anderson said.
“Consumers vote with their pocketbook,” Anderson said. “And their pocketbooks are saying we don’t need as many cage-free eggs.”
How pork could impact eggs
A contentious federal court case also could impact the speed at which the industry pursues its cage-free goals Last fall, the U.S. Supreme Court heard oral arguments in a challenge to California’s Proposition 12.
Pork industry leaders contend that the state overstepped by not allowing them to sell products from states where cage-free adoption is not enforced. The state of California countered, contending that the law took effect only because 63% of Californians voted to enact the measure in 2018. The Court is reviewing the case, and its decision is expected soon.
While the case revolves around the pork industry, the Court’s decision could have downstream effects on the egg sector. If the Court decides in the pork industry’s favor, Anderson said legal challenges from the egg industry then could be levied against states that do not allow the sale of eggs from caged hens.
“The logical progression would be that the egg industry would follow the same direction that the pork industry did,” Anderson said. “The implication is that it would give California consumers alternative choices for what products they can purchase.”
Public opinion, while divided about higher egg prices, is overwhelmingly in favor of cage-free eggs. Kate Brindle, a public policy specialist at the Humane Society, cited a 2022 poll from Data For Progress that found 80% of consumers surveyed are against cage confinement for egg-laying hens.
“Those few outlier companies that are breaking their commitments are harming egg farmers who have made serious investments into converting to cage-free housing systems,” Brindle said.
Other industry figures have raised animal health and environmental risks stemming from the adoption of aviaries, the most common cage-free alternative for eggs.
A 2016 report from the Coalition for Sustainable Egg Supply stated that hen mortality is higher with cage-free animals compared to traditional cages because it is easier for hens to spread germs — a particular concern as the avian influenza outbreak rages on. The report also said hens in a cage-free environment are aggressive and sometimes cannibalistic and alleged that it could increase health risks for farmers.
Though some skeptics note that the study may be flawed because it only tracked a single production facility where producers had no prior experience working with cage-free systems. A different report published by Scientific Reports in 2021 found no difference in mortality between hens in cage and cage-free systems.
“Because of the dollar investment that is required to move toward cage-free eggs, it’s not moving at a fast pace.”
Dr. Kenneth Anderson
Commercial layer and small flock management professor at North Carolina State University’s Prestage Department of Poultry Science
Consumers have the final say
Over half (62.5%) of egg producers said legislation will be the primary reason they adopt cage-free housing for their hens, reported a WATT Poultry survey.
“What we producers failed to realize early on was that the people funding all the animal rights activist groups, they were our customers. And at the end of the day, we have to listen to our customers,” Marcus Rust, CEO of Rose Acre Farms, the second-largest egg producer in the country, told PBS.
Companies that have committed to cage-free production are navigating headwinds, such as Vital Farms that sells pasture-raised free range eggs.
In a January interview with Yahoo Finance, Vital Farms CEO Russell Diez-Canseco called the price increases “a head-scratcher” but said the company would not increase costs dramatically for consumers. Some consumer advocacy groups have accused major egg producers, such as Cal-Maine, of artificially inflating its prices.
“The reality is, we’re building a brand for the long haul, and we’ve grown our supply year in and year out for 15 years straight,” Diez-Canseco said. “We don’t see a short-term supply and demand shock as an opportunity to just goose our profits and that's not how we’re operating.”
