Egg Industry Preps for Cage Mandates

Dec. 9, 2021
Cal-Maine, the largest U.S. egg producer, is getting whipsawed by demand for cage-free eggs.

Cal-Maine, the largest U.S. egg producer, is getting whipsawed by demand for cage-free eggs.

Eggs from hens that have not been confined to tiny cages is steadily rising, prompted by trade customers like Whole Foods. Demand will increase even more when California’s law mandating minimum space for laying chickens goes into effect Jan. 1; starting then, all eggs sold in the state – no matter where they come from – have to be laid by hens whose cages met minimal space standards.

Cal-Maine CEO Dolph Baker told a recent conference that right now, the supply of cage-free eggs exceeds the demand, because so many producers anticipated the spike in demand that they overproduced. In some cases, cage-free eggs are being “downpackaged” as the regular kind. But he anticipates that the demand will balance out as cage-free mandates take hold in California and other states.

Baker estimates that it takes about $45 per bird for the average poultry farm to bring its cages up to California-style standards. He estimated that the total cost to the industry might be $6 billion, “and I don’t see how that can happen.”

Cal-Maine, which has about 19% of the U.S. retail market, is also dealing with seesawing demand between foodservice and retail. Foodservice demand is once more picking up as people eat out again, while retail demand dropped this year after spiking last year, Baker said.

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