U.S. egg industry faces disruption as California's cage requirements kick in January 1

by | Dec 22, 2014 | Audio, News

FLANDREAU, S.D. – Big changes are rapidly approaching the U.S. egg industry after the first of the year.

Beginning on January 1, any egg sold in California will be under stricter production standards with regard to space for the laying hens which produced it.

That’s due to a California state law signed in 2010, and according to Scott Ramsdell, President of South Dakota-based Dakota Layers, “California is a large market for the whole United States.”

Under the new California law, laying hens will require one hundred 16 square inches of housing if their eggs are to be sold in the state, and because of the change, Dakota Layers predicts a shortfall of 22 million layings, which represents about 6.2 billion fewer eggs per year. Ramsdell says his company will focus on California in 2015.

“We just got done putting up a building which cost millions of dollars,” Ramsdell explains. “We’ve not been able to increase our population at all. So we’ve just increased our overhead… to be in compliance with the state of California. The difference for us is that, in the past, we had about 15 percent of our eggs that went to the state of California, and now it’ll be more like 60-plus percent of our eggs going to the state of California.”

Adding buildings but not increasing population is a financial hit Ramsdell says others in the poultry industry are hesitating to take. But he says that likely means difficulties for California consumers come the first of the year.

The Sacramento Bee reports the new egg laws for California are compiling a mound of uncertainty, coming from both the industry, which predicts higher prices, and from the Humane Society of the United States, which claims the new production standards don’t go far enough.

The Association of California Egg Farmers has pegged the price tag of the new production standards at around $400 million for the state of California, or the housing of fewer hens. Each would trigger a price spike in eggs. Still, farmers across the country are expected to adhere to the law if their products wind up in California. Enforcement though is still in the air, with many eggs being imported into California.

Humane Society of the United States President Wayne Pacelle told the Bee that farmers are likely to fall short of voters’ expectations, and that freeing hens from cages is the only sure way to follow the law.

United Egg Producers President Chad Gregory said his group is convinced that the voters in California really didn’t know what they were voting for, noting that even six years after the vote, consumers are still buying eggs from the same system they voted against.

Since 2001, Iowa has been the nation’s top egg producer. In November alone, Iowa’s 59 million laying hens produced just under 1.5 billion eggs.

To hear more about how the new California law will affect the U.S. egg industry, click the audio player above this story.