Latest Flap on Egg Farms: Whether to Go ‘Cage-Free’
As states ban small cages, customer demands are weighed against the higher costs
Rose Acre Farms in Indiana, one of the U.S.'s largest egg producers, has created a cage-free facility for some of the company's 25 million egg-laying hens in order to comply with a patchwork of new state laws and rules. Photo: Taylor Glascock for The Wall Street Journal
Should egg-laying chickens roam free or live in roomy cages?
That question is roiling the $9 billion U.S. egg industry as producers grapple with new state laws and food-company policies aimed at improving the well-being of the country’s 305 million egg-laying hens. The revised rules target the cramped cages that have dominated the industry for decades, enclosures that typically confine birds to 67 square inches each—smaller than a standard sheet of paper.
Many egg farmers are torn between two strategies: investing in expensive “cage-free”facilities or building larger cages, a less-costly move that generally complies with new laws but doesn’t satisfy all food purveyors and animal-rights advocates.
Cage-free eggs fetch a premium—at times even doubling the price—but it isn’t clear how large the market will become, farmers say. Going cage-less also comes with another cost: all that freedom typically means a higher percentage of hens die prematurely—sometimes from injuries suffered in flight or from pecking by other chickens, according to animal scientists and farmers.
Setting off the latest egg-farming conundrum was California, which in January began requiring every shell egg sold in the most-populous state to come from hens that have room to lie down, turn in a circle and extend their wings. Washington, Oregon, Michigan and Ohio have hen-cage laws taking effect in coming years, and bills are pending in other states.
“It’s very difficult for egg producers to comply with multiple rules,” said Jim Dean, chief executive of Centrum Valley Farms, an Iowa egg producer.
Wholesale egg prices in California jumped to more than $3.40 a dozen in January due to shortages as producers sought to comply with the state’s new law, according to research firm Urner Barry. Prices since have fallen to about $2 a dozen.
Meanwhile, Nestlé SA and Starbucks Corp. last year unveiled plans to phase out the use of eggs from caged hens, joining businesses including Burger King and Aramark Corp. that earlier made similar pledges.
Marcus Rust, chief executive of Rose Acre Farms, one of the largest U.S. egg producers—with roughly 25 million hens—is wagering that the future lies in cage free. About 18 months ago, Mr. Rust said, his closely held company decided that every facility it builds or refurbishes will lack cages.
The move came down to dollars and cents, not what’s best for Rose Acre’s hens, most of which remain caged for now. “Farming is about making a profit, and if someone is willing to pay us extra, we’re going to do that,” said the 58-year-old, whose grandfather started the egg business that became Rose Acre. It will take up to 30 years to completely convert to cage-free housing, Mr. Rust said.
Demand for cage-free eggs is small but growing. Seventeen million U.S. egg-laying hens were cage-free as of September—6% of the U.S. flock—up from 15 million three years earlier, according to federal data.
Going cage-less is a major shift for Rose Acre, based in Seymour, Ind. In 2010, the Humane Society of the U.S. released undercover videos of farms owned by Rose Acre and a competitor that showed birds in crowded cages, some injured or dead. Mr. Rust said the video was misleading. Rose Acre was able to blunt the impact by inviting local media to come and photograph its operations.
On a recent morning at a Rose Acre complex in Frankfort, Ind., 170,000 hens roamed about a 550-foot-long barn, clucking and cooing. Some perched on metal rods. Others run up and down slanted metal ramps. Nesting boxes covered with red doors provide a dark, sheltered place to lay eggs, which roll onto conveyor belts and are whisked to a production plant.
The facility—among the largest cage-free henhouses in the U.S., according to Mr. Rust—cost about $5 million to build. Rose Acre has more than $500 million in annual sales.
Farmers say cage-free systems cost roughly $10 a bird more than large-cage facilities to build, or an additional $1 million for a barn containing 100,000 birds. Uncaged birds eat more because they are more active, raising feed costs.
Cage-free and large-cage henhouses raise farmers’ expenses because they have fewer hens over which to spread the cost of equipment, heating and other supplies. Some growers are simply culling chickens from conventional housing to meet California’s requirement that each bird get at least 116 square inches of living space.
Cage-free systems are “not better animal welfare, it’s just different animal welfare,” saidChet Utterback, who manages a poultry research farm at the University of Illinois at Urbana-Champaign. “It’s going to increase the cost of eggs. And that takes the cheapest, most valuable source of protein out of poor people’s mouths.”
Industry proponents of the large cages, known as “enriched colonies,” argue they are safer than cage-free systems because there is less contact between the birds, their eggs and manure. The colony cages include perches, nesting boxes and scratching areas.
“It seems to be the most balanced system,” said Greg Satrum, vice president of Willamette Egg Farms in Oregon, which has the big cages and some cage-free housing.
Chickens roam in a cage-free facility at Rose Acre Farms in Frankfort, Ind. PHOTO: TAYLOR GLASCOCK FOR THE WALL STREET JOURNAL
Colony cages came close to getting a boost a few years ago, when United Egg Producers, which represents most U.S. egg farmers, joined the Humane Society to lobby for a uniform federal egg law that would have required the bigger cages nationwide. Meat-industry groups objected, though, fearing it would create a precedent for similar rules. The legislation failed, and now farmers must contend with a patchwork of state laws.
Rose Acre’s Frankfort henhouse, which opened last November, is still working out some kinks, Mr. Rust said. Some birds have died from suffocation inside nest boxes when “hens have piled in on top of each other,” he said. “We think we can fix that with some design changes.”
Mr. Rust said he would have been comfortable using colony cages. But he often thinks about his wife’s response when he showed her a cage-free facility. “She said, ‘Why wouldn’t you just do that for all of them?’”
Write to David Kesmodel at david.kesmodel@wsj.com
