Several states and retailers have established 2026 as the deadline for egg producers to transition to cage-free systems, a move perceived by many as aligned with consumer preferences. However, egg farmers are requesting additional time to implement these changes. A study released in February by the FMI Foundation and United Egg Producers highlighted the significant costs associated with upgrading facilities for cage-free production as a major barrier to this transition. The expense for cage-free machinery, especially aviary systems that provide more space for movement, can exceed $40 per bird. Kenneth Anderson, a professor of commercial layer and small flock management at North Carolina State University’s Prestage Department of Poultry Science, remarked, “Due to the financial investment required to make this shift, progress is not happening quickly.”
When the conversion to cage-free production started in earnest in 2014, experts estimated that the industry would incur approximately $10 billion in costs. According to Anderson, these expenses have already surpassed that estimate. The shift to a national cage-free egg production system, long advocated by animal welfare activists and supported by food companies like Nestlé and Conagra, as well as retailers such as Whole Foods and McDonald’s, seemed imminent. At least nine states, including California, Massachusetts, and Utah, have enacted laws mandating that all egg-laying hens be housed in cage-free environments by 2024 or 2026. California’s 2018 ban became effective last year, resulting in a dramatic increase in egg prices in the state. As reported by The Wall Street Journal, Californians were paying $5.62 for a dozen eggs in early February, while non-cage-free eggs in the Midwest were priced at $3.05. A study published in the American Journal of Agricultural Economics predicted that this law would lead to an annual loss of $23 million for consumers in California.
With another outbreak of highly pathogenic avian influenza (HPAI), discussions about egg prices across the U.S. have intensified as prices soared in the past year. Consumer advocacy groups have accused some companies of price gouging, questioning the motivations behind the steep price increases. According to the latest Consumer Price Index from the U.S. Bureau of Labor Statistics, grocery store egg prices surged by 70.1% in January compared to the previous year. As of February 1, the USDA reported that a dozen extra-large brown cage-free eggs cost $4.79, up from $2.66 a year earlier. The FMI study indicated that the primary barrier to adopting cage-free production is the capital investment required. Overall, costs for cage-free production are estimated to be between 8% and 19% higher than for non-caged systems, accounting for additional labor expenses.
While many states have set deadlines for 2026, the study authors noted that it may take longer for the entire country to implement this shift. They suggested that extending the deadline and providing government assistance could allow more time for the industry to build the necessary facilities and acquire the required operational equipment. Major retailers, including Walmart and Kroger, have already withdrawn their commitments to supply 100% cage-free eggs by 2025.
Currently, cage-free eggs represent 34.6% of the total egg-laying flocks in the U.S., according to WATT Poultry. Predictions indicate that half of U.S. egg-laying hens will still be housed in cages by 2025, and it is improbable that 100% will be cage-free by 2040, based on surveys conducted within the egg industry. Some companies are delaying their transition to cage-free systems because many consumers are unwilling to pay the higher prices for these eggs. Anderson noted, “Consumers vote with their pocketbooks,” indicating that their purchasing behavior suggests a lower demand for cage-free eggs.
A contentious federal court case may also affect how quickly the industry pursues its cage-free objectives. Last fall, the U.S. Supreme Court heard arguments in a challenge to California’s Proposition 12. Pork industry leaders argue that the state overstepped by prohibiting the sale of products from states without cage-free requirements. California responded by stating that the law was enacted due to the support of 63% of voters in 2018. The Court’s decision, expected soon, could have implications for the egg sector as well. If the ruling favors the pork industry, Anderson suggested that legal challenges could arise regarding the sale of eggs from caged hens in states that do not enforce similar laws.
Public opinion remains divided over rising egg prices, but there is strong support for cage-free eggs. According to a 2022 poll from Data For Progress cited by Kate Brindle, a public policy specialist at the Humane Society, 80% of surveyed consumers oppose cage confinement for egg-laying hens. Brindle added, “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.”
Concerns have also been raised regarding animal health and environmental risks linked to aviaries, which are the most common cage-free alternative. A 2016 report from the Coalition for Sustainable Egg Supply indicated that hen mortality rates are higher in cage-free environments due to the increased potential for germ spread, especially during avian influenza outbreaks. The report also suggested that hens in cage-free settings can be aggressive and cannibalistic, potentially posing health risks for farmers. However, some skeptics argue that the study may be flawed since it only examined one production facility with no prior experience in cage-free systems. In contrast, a different study published in Scientific Reports in 2021 found no significant difference in mortality rates between hens in cage and cage-free environments.
Over half (62.5%) of egg producers indicated that legislation would be the main driver for adopting cage-free housing for their hens, according to a survey by WATT Poultry. Marcus Rust, CEO of Rose Acre Farms, the second-largest egg producer in the U.S., stated, “What we producers failed to realize early on was that the people funding all the animal rights activist groups were our customers. And at the end of the day, we have to listen to our customers.”
Companies committed to cage-free production, such as Vital Farms, face various challenges. In a January interview, Vital Farms CEO Russell Diez-Canseco described the recent price hikes as “a head-scratcher” but assured that the company would not significantly raise costs for consumers. Some consumer advocacy groups have accused major egg producers, such as Cal-Maine, of artificially inflating prices. Diez-Canseco emphasized, “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. 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.”
In this context, producers must also consider the impact of nutrition on their flocks, including factors such as how much calcium citrate is too much, as optimal nutrition is vital for maintaining healthy hens in both cage-free and caged environments. The interplay of costs, consumer preferences, and regulatory pressures will continue to shape the future of the egg production industry as it navigates the transition to cage-free practices.